Car Insurance - Is there ANY regulation in the industry?
Discussion
So I've just sorted my insurance for another year. Didn't stay with the current company as, despite now having 16 years NCB they tried to put up the premiums.
Went online to see what was on offer. Now, bearing in mind, I entered the same details, for the same vehicle, on the same day, this is what happened:
Went onto a well-known comparison site with a furry mascot, and got a decent price with one insurer. Went onto another well-known comparison site with an annoying singing dude, and got a much higher quote, curiously through the same insurer. Then went onto said insurers site and got yet another figure. The difference between the highest and lowest was almost DOUBLE, yet they were all through the same insurer!
I don't know how they calculate insurance premiums, but I'm beginning to suspect it is nothing more than a random number generator...
Right, rant over, I'm off to bed!
Went online to see what was on offer. Now, bearing in mind, I entered the same details, for the same vehicle, on the same day, this is what happened:
Went onto a well-known comparison site with a furry mascot, and got a decent price with one insurer. Went onto another well-known comparison site with an annoying singing dude, and got a much higher quote, curiously through the same insurer. Then went onto said insurers site and got yet another figure. The difference between the highest and lowest was almost DOUBLE, yet they were all through the same insurer!
I don't know how they calculate insurance premiums, but I'm beginning to suspect it is nothing more than a random number generator...
Right, rant over, I'm off to bed!
FraserLFA said:
Whoa Harsh!
True, but the amount of insurance related threads that are on here is astonishing.I buy £150 of petrol every week, yet don't expect to understand the mechanics of how they price their product and the forecourt prices vary significantly.
As for the cost going up, why does everyone think insurance is a permanently deflaitionary product?
The article in this is worth a read.
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
RPMOverlord said:
...I don't know how they calculate insurance premiums, but I'm beginning to suspect it is nothing more than a random number generator...
Ive thought much the same since insuring my old pug a few years back. I phoned the same company with the same details 3 times and got 3 different prices?!They make it up, I'm sure they do.
Edited by MrPickle on Sunday 7th November 23:33
So what act of unfair trading would regulation solve here?
These threads are a f
king joke.
As if these threads alone weren't enough, I was in a restaurant the other night and a group of four forty-something year olds were discussing insurance. One of them mentioned how an acquaintance of theirs had modified their exhaust, resulting in their premium going up £500. None of the others could get their head around why, since: "Yer but it's only an exhooooorst, don't change how fast it goes, does it?". The simpleton couldn't attain a reason in his mind as to why having a tin can on the back would ring alarm bells at the insurance company of the high probability of him being a boy-racer.
Absolute pond life. Bet they were all scratching their head about why the insurance company asked for their ages when getting a quote, "cos being younger don't speed the car up", that said, one of them was morbidly obese.
These threads are a f
king joke.As if these threads alone weren't enough, I was in a restaurant the other night and a group of four forty-something year olds were discussing insurance. One of them mentioned how an acquaintance of theirs had modified their exhaust, resulting in their premium going up £500. None of the others could get their head around why, since: "Yer but it's only an exhooooorst, don't change how fast it goes, does it?". The simpleton couldn't attain a reason in his mind as to why having a tin can on the back would ring alarm bells at the insurance company of the high probability of him being a boy-racer.
Absolute pond life. Bet they were all scratching their head about why the insurance company asked for their ages when getting a quote, "cos being younger don't speed the car up", that said, one of them was morbidly obese.
Edited by Complex on Sunday 7th November 23:53
FraserLFA said:
But OP's point was,
he got a quote through 3 methods for the same insurance from the same company, and yet it varied massively.
He wasn't compaining about different quotes from different companies.
OK, the explanantion is fairly straightforward, but unlikely to educate anyone, as it's much easier to stay ignorant (not you btw).he got a quote through 3 methods for the same insurance from the same company, and yet it varied massively.
He wasn't compaining about different quotes from different companies.
It would depend when he rang. Premiums are very price & competition sensitive, whereas in the past they used to be valid for 28 days, as everyhting was wored out on an abacus & rate book, things have moved on.
If an insurer finds it is too cheap / expensive it will amend it's price accordingly very quickly. Sometimes this works for you, sometimes against.
R1 Loon said:
FraserLFA said:
But OP's point was,
he got a quote through 3 methods for the same insurance from the same company, and yet it varied massively.
He wasn't compaining about different quotes from different companies.
OK, the explanantion is fairly straightforward, but unlikely to educate anyone, as it's much easier to stay ignorant (not you btw).he got a quote through 3 methods for the same insurance from the same company, and yet it varied massively.
He wasn't compaining about different quotes from different companies.
It would depend when he rang. Premiums are very price & competition sensitive, whereas in the past they used to be valid for 28 days, as everyhting was wored out on an abacus & rate book, things have moved on.
If an insurer finds it is too cheap / expensive it will amend it's price accordingly very quickly. Sometimes this works for you, sometimes against.
[quote=FraserLFA
I agree completely with what you're saying, but i think that's what the OP was wondering. I don't think he meant it like the other "Insurance companies have fleeced me once again etc etc" threads that pop up here.
[/quote]
In the OPs case, then it works like this. Insurers do NOT have standard rates, they will work out a price based on the performance of a book with a specific broker over time. In addition that broker will negotiate a commission rate that varies. As the books mature, some brokers decide not to take certain risks themselves, as it could mess up their renewal rates for the book next year and / or affect any profit share they may receive.
Other brokers / insurers may become over / underweight in an area and to balance that risk they increase / drop their price to dissuade / attract more business.
Some brokers want to deal only in low / high risk, so they quote stupid rates if the risk doesn;t match their desired customer profile. This is why Mr Safe can end up with a £99999 quote.
Prices vary and we should be thankful for this. The more regulation that exists, the more insurers will pull out of niche markets, and move to one standard price for all. Bleive me, that price would not be attractive to many, apart from the drunk driving, 11 point chav.
I agree completely with what you're saying, but i think that's what the OP was wondering. I don't think he meant it like the other "Insurance companies have fleeced me once again etc etc" threads that pop up here.
[/quote]
In the OPs case, then it works like this. Insurers do NOT have standard rates, they will work out a price based on the performance of a book with a specific broker over time. In addition that broker will negotiate a commission rate that varies. As the books mature, some brokers decide not to take certain risks themselves, as it could mess up their renewal rates for the book next year and / or affect any profit share they may receive.
Other brokers / insurers may become over / underweight in an area and to balance that risk they increase / drop their price to dissuade / attract more business.
Some brokers want to deal only in low / high risk, so they quote stupid rates if the risk doesn;t match their desired customer profile. This is why Mr Safe can end up with a £99999 quote.
Prices vary and we should be thankful for this. The more regulation that exists, the more insurers will pull out of niche markets, and move to one standard price for all. Bleive me, that price would not be attractive to many, apart from the drunk driving, 11 point chav.
frosted said:
So why didn't you say that in the first place ??
Knobber
Because I've said it on hundreds of posts over the past year or so, but few seem to want to hear it, instead going for the "Outraged of Winchester" style post.Knobber
Edited by frosted on Monday 8th November 00:06
Put simply Motor Insurance in the UK costs the providers on average £1.15 for every £1 they recive in premium, excluding investment returns (not very good due to regulatory requirements) and operational cots to administer the live policies. It's getting worse, a lot worse.
frosted said:
Maybe you should read what he posted not what you want to read
Just a thought
He posted that he went on 3 different sites and got three different quotes/ No real surprise there, two of them were aggreagtors, one was a direct site. Some of the direct players, no longer want business through the aggregators due to an substantial increase in fraud, or lack of detailed information.Just a thought
The key point for me was "they tried to put my premium up". Why does everyone think insurance can only go down in price?
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