Car Insurance

RaymondLin · September 2023

I am preparing myself for the same hike...was about £400 last year too, if it is less than £600 I'll be happy.

westford · September 2023

Last year £311.21, this year’s renewal quote £599.52

fretmeister · September 2023

munckee said:

fretmeister said:

munckee said:

fretmeister said:

The amount of payouts dropped massively in lockdown because nobody was driving anywhere. So that led to massive profits for about 18 months.

Now it's nearly back to normal (there's still a lot more people doing lower mileage and working from home) but the shareholders still want to maintain the extra profit levels.

The insurers have claimed there is a massive increase in claims - of course.... but only from the tiny amount during lockdown... and they don't mention that anywhere in their 'justification'.

They are full of crap.

Insurers spent £1.10 for every £1 they took in 2022, the current increases are expected to mean they spend 97,4p for every £1 they take in 2023/4 according to the FT

Did that income include the massive amount they get from selling our data?

Only Admiral have ever been open about that in the past - they said data was actually a larger income than the insurance products themselves.

I believe GDPR has put paid to that but I might be wrong.

The permissions are in the sales bumpf that nobody reads.

Fishboy7 · September 2023

Worth shopping around though. My renewal quote on my 335i came through from Admiral as about £50pm , Up from about £35pm.

I ended up switching to Santander for about £28pm including RAC cover. (Can't remember the exact amounts).

HAL9000 · September 2023

HAL9000 said:

nero1701 said:

I just quoted out of interest...

2015 M135i

5000 Miles

Fully Comp

12 Years NCD

No Accidents in past 6 years

Private carpark

£414 last year

£690 this year

Almost exactly this. My renewal quote arrived yesterday. £434 last year; £682 this year. That’s a 56% increase! Yours looks even worse. I’ve just been on the comparison websites and the cheapest like-for-like quote was £679 (a saving of £3); the most expensive was around the £1400 mark.

Just saved over £100 by taking my son (who lives at a different address) off the policy. He was only ever on there for ‘just in case’ situations.

Snap · September 2023

My insurance renews next month. gone from 525 to 870. Delighted. A quick comparison site check and my renewal figure is actually the best offer.
Shysters.

westford · September 2023

westford said:

Last year £311.21, this year’s renewal quote £599.52

Told them I wanted to cancel and got the quote down to £450, but have gone elsewhere for £329.

Sporky · September 2023

munckee said:
Insurers spent £1.10 for every £1 they took in 2022

What about every other year on record?

Insurance is gambling. The insurance companies would do well to remember that.

I once had a stupid renewal hike, and when I queried it the scrote on the phone said "we've had a bad year". That was the year my mum died.

Car insurance is too important to allow the private sector to be involved. Especially if it's a legal requirement.

skunkwerx · September 2023

Insurance is not gambling.

Its risk transfer. Gambling is a speculative risk meaning there can be three outcomes, loss, break even or gain, and thus it is a generally non insurable risk.

Insurers are bound by FCA and PRA regulations, one of which states in black and white that premiums must be several things, one of which must include a profit for the firm itself. Otherwise like any business (and many insurers right now) they are pulling out of the market altogether.

That profit element is business profit, not a good result of a gamble.

Same as every other business that hopes to survive.

Insurers are bound to a PRA regulation that they must have enough finance in the common pool to cover a worst case scenario, ie everyone makes a claim and insurer needs to pay out the max for everyone.

Its not as simple as 'i've no claims so why am I getting a higher premium'.

Its the overall risk that you bring to the common pool based on many factors, all of which are calculated against statistic data, and then all of that is audited by the FCA to make sure the insurer is remaining compliant.

The fines are hefty if not.

I get it, before I had a CII qualification and worked in the sector I also couldnt understand how premiums are the way they are.

What else can we do? Self insure? No one has the kind of money you may end up paying out if you injured someone.. hell most of us couldnt even afford to pay out for a third partys minor fender bender let alone cover the costs of repairing our own cars.

When you see the costs of actually how much claims come to, you would stare in disbelief at the figures, as I did in my first few months.

skunkwerx · September 2023

Same for me though, my premium is still massive this year, £700 odd

JEM · September 2023

skunkwerx said:

<snip>

When you see the costs of actually how much claims come to, you would stare in disbelief at the figures, as I did in my first few months.

I know you're directly involved in the industry and know this better than I but it seems to me that the cost of claims is not being helped by shady claims management companies bloating repair costs and schedules and then pushing hire vehicles on claimants that neither want or need them. From my experience some insurance brokers are complicit in this.

RaymondLin · September 2023

skunkwerx said:

Insurance is not gambling.

Its risk transfer. Gambling is a speculative risk meaning there can be three outcomes, loss, break even or gain, and thus it is a generally non insurable risk.

Insurers are bound by FCA and PRA regulations, one of which states in black and white that premiums must be several things, one of which must include a profit for the firm itself. Otherwise like any business (and many insurers right now) they are pulling out of the market altogether.

That profit element is business profit, not a good result of a gamble.
Same as every other business that hopes to survive.

Insurers are bound to a PRA regulation that they must have enough finance in the common pool to cover a worst case scenario, ie everyone makes a claim and insurer needs to pay out the max for everyone.

Its not as simple as 'i've no claims so why am I getting a higher premium'.

Its the overall risk that you bring to the common pool based on many factors, all of which are calculated against statistic data, and then all of that is audited by the FCA to make sure the insurer is remaining compliant.

The fines are hefty if not.

I get it, before I had a CII qualification and worked in the sector I also couldnt understand how premiums are the way they are.

What else can we do? Self insure? No one has the kind of money you may end up paying out if you injured someone.. hell most of us couldnt even afford to pay out for a third partys minor fender bender let alone cover the costs of repairing our own cars.

When you see the costs of actually how much claims come to, you would stare in disbelief at the figures, as I did in my first few months.

Having worked for a law firm in a department where they were a panel solicitor for some of the largest insurance companies in Europe (and the world) on catastrophic injuries - brain damage, spinal damage, children having a car accident, or high flyer career person claiming for loss of earnings + periodical payments, I have seen first hand in some of the numbers from the claims, the numbers from the quarterly fees bill, the claimant's solicitor fees, the Barister's fees.

1 of these large cases like these can go well into 7 figures after it is all set and done.

munckee · September 2023

Let’s not forget our propensity to pretend we have whiplash to get the compensation we “deserve”.

TTony · September 2023

JEM said:

skunkwerx said:

<snip>

When you see the costs of actually how much claims come to, you would stare in disbelief at the figures, as I did in my first few months.

I know you're directly involved in the industry and know this better than I but it seems to me that the cost of claims is not being helped by shady claims management companies bloating repair costs and schedules and then pushing hire vehicles on claimants that neither want or need them. From my experience some insurance brokers are complicit in this.

Motor Insurance has long - certainly since my more hands-on days through the 90s/00s - been a marginal business for insurers in terms of profitability. It generates a lot of revenue, but little of that (if any) is left at the end of the year.

It used to be that investment income offset the losses (ie £claims+costs > £premiums) as - on average - the insurer would have the cash for 6mths before needing to pay out a claim, so could make some investment return in that period.

The low-interest rate era (early 00s onwards) challenged that business model - so insurers did 2 things. They could/should have increased premiums at that stage so that the core business was sustainable, but competition (and the market is ridiculously competitive, driven by price) forced them to do other things.

Firstly, they looked to build up non-risk income from the motor business. That means generating additional revenue that isn't exposed to the same risk, ie would be more reliable and stable. Aviva bought RAC and - IIRC - autoglass in that period. The second was that they broke up the value chain - ie outsourced anything and everything that they possible could to take cost out of their P&L.

Those actions led to the involvement of more and more third parties providing services, each screwed to the ground on the costs they could charge the insurer, so each also looking to leverage revenue out of the process elsewhere.

That's why you get data leakage - ie why you get calls from "claims administration services" and ambulance chasers if/when you have an accident, both of which end up with costs to the insurer and drive premiums higher. It's also why hire car charges are so ridiculous (there are lots of commission payments to cover to the various parties involved).

The burning cost is around 1/2 - 2/3rds of the total cost - ie you're paying the extra to cover those additional services, not the direct cost of repairing the vehicles or genuine bodily injury claims. At least, it *was* around 1/2 - 2/3rds, might be different nowadays.

But the burning cost has also been pushed up recently - repair costs (materials, labour, overheads), parts costs (what was a £100 bumper is now a £1000 part with integrated electronics/sensors all needing recalibration), and it's also harder to repair some cars - ie rather than a £2000 repair bill, it's now a £20,000 write-off. Plus of course, us customers demand/expect a perfect, no-cost-spared, good-as-new repair for our battered old Focus, else we'll be onto the Ombudsman.

TL:DR; premiums might be going up, but little of that will end up in dividends to insurance shareholders.

m_c · September 2023

Repair costs and the amount of vehicles now being repaired are probably the biggest cost increases over the past year.

Vehicles are currently worth more, so a lot more older vehicles, which previously would have been written off are now being repaired. There also appears to be an increase in people fighting write-offs, due to the cost of replacement vehicles.
I read somewhere the other day about somebody having a focus repaired that was costing 75% of the value, which in the past 50% was typically the write-off threshold, and that's apparently happening more.

And combine that with a lack of skilled staff, and bodyshop labour costs have gone up like most of the motor trade.

EricTheWeary · September 2023

Just been sorting my camper insurance. God it’s a dull thing to do. Two hours to save £60 still probably the best paid hours I’ll have this year.

Edit: Motor Direct FWIW.

skunkwerx · September 2023

EricTheWeary said:

Just been sorting my camper insurance. God it’s a dull thing to do. Two hours to save £60 still probably the best paid hours I’ll have this year.
Edit: Motor Direct FWIW.

Motor direct are part of A-plan, one of our biggest brokers. They seem good.

Do you know who underwrites the policy you went with? Wonder if its one ours!

PLOP · September 2023

My insurance just came up for renewal and the insurer I was with quoted the cheapest price even after all the comparison sites. It’s still increased by more than £80, for no reason at all.

I can’t remember what the insurer is called, but I absolutely do not trust them to pay out. I don’t even think I could find a contact phone number for them. Anyway, even if you do go through your insurance and make a claim, it is essentially suicide for your driving license because it means you will not be able to afford to insure next year.

boogieman · September 2023

PLOP said:

My insurance just came up for renewal and the insurer I was with quoted the cheapest price even after all the comparison sites. It’s still increased by more than £80, for no reason at all.

I can’t remember what the insurer is called, but I absolutely do not trust them to pay out. I don’t even think I could find a contact phone number for them. Anyway, even if you do go through your insurance and make a claim, it is essentially suicide for your driving license because it means you will not be able to afford to insure next year.

Well that’s the thing, you could go with Fred Bloggs Insurance and save £50, or pay up and get better service and peace of mind. Fwiw I had to make a claim this year, I’m insured with LV. I honestly couldn’t fault the process… I rang them, they picked up our car next day and dropped off a hire car at the same time. 10 days later the process was reversed. My premium went up £150 this year, from £340 to £490 , but it was still the cheapest quote I got on any of the comparison sites.

EricTheWeary · September 2023

skunkwerx said:

EricTheWeary said:

Just been sorting my camper insurance. God it’s a dull thing to do. Two hours to save £60 still probably the best paid hours I’ll have this year.
Edit: Motor Direct FWIW.

Motor direct are part of A-plan, one of our biggest brokers. They seem good.

Do you know who underwrites the policy you went with? Wonder if its one ours!

They did say but by that time my head hurt too much to take notice. I guess it will be on the certificate (we need a paper one for European travel, apparently the French police won't look at your phone). Never made a claim but have had other reasons to speak to Motor Direct over the last three years and they have been very helpful.

Kittyfrisk · September 2023

Having just had my renewal, I'm now looking for quotes like many others.
Over 9 years NCB, low annual mileage, no accidents in seven years (last was a no fault), no convictions, cheap car etc.
Last year was £155.04 fully comp.
This year £408.07... FFS!

CavemanGrogg · September 2023

Who would have thought that there are so many Actuaries, that are members here.

Until the Royal Mail was sold off, there was a nationalised insurance scheme for drivers, you could get your car insurance from your local post office, though it was bloody expensive and didn't just require you to pay your premiums, but also have a rather large chunk of cash set aside in case of a claim, it was so expensive that the only people who could afford to use it where quite rich who couldn't find a privately owned insurance company that would insure them, rich enough to employ drivers rich it was that expensive.

rlw · October 2023

Mate of mine lives in the middle of nowhere, down a long track even further from nowhere (google Foggathorpe) and has a spotless record. Is also a volunteer policeman with the rural crime unit in Howden.

Renewal was a bit high so he looked around for quotes and could onlyget 4. Cheapest was still 80% higher than last year, but still cheaper than renewing. Even NFU wouldn't touch him.

Reason given. Range Rover.

CavemanGrogg · October 2023

rlw said:

Mate of mine lives in the middle of nowhere, down a long track even further from nowhere (google Foggathorpe) and has a spotless record. Is also a volunteer policeman with the rural crime unit in Howden.

Renewal was a bit high so he looked around for quotes and could onlyget 4. Cheapest was still 80% higher than last year, but still cheaper than renewing. Even NFU wouldn't touch him.

Reason given. Range Rover.

It's the same with electric cars, a number of insurers are actually refusing to insure them right now. I recently looked at becoming a car owner again, and was warned off of certain brands, models and even vehicles due to insurance, not just costs but also due to insurance companies refusing to insure them.

skunkwerx · October 2023

CavemanGrogg said:

rlw said:

Mate of mine lives in the middle of nowhere, down a long track even further from nowhere (google Foggathorpe) and has a spotless record. Is also a volunteer policeman with the rural crime unit in Howden.

Renewal was a bit high so he looked around for quotes and could onlyget 4. Cheapest was still 80% higher than last year, but still cheaper than renewing. Even NFU wouldn't touch him.

Reason given. Range Rover.

It's the same with electric cars, a number of insurers are actually refusing to insure them right now. I recently looked at becoming a car owner again, and was warned off of certain brands, models and even vehicles due to insurance, not just costs but also due to insurance companies refusing to insure them.

Range rovers are just high risk these days. Big expensive powerhouses, a lot of claims.

Some insurers are working with motor brands to cede elements of the risk over to them, which is a typical method to lower the risk to the insurer, to an acceptable standard at least.

I think a big problem is people live outside of their means these days because its so easy to, with finance.

A premium or expensive motor is going to be expensive to maintain/repair and insure. It used to come with the territory.

But, car prices and parts, same as building materials etc have become so expensive these days anyway..

WafflesOnHorseback · October 2023

600 quid two years ago. 800 last year. 1400 this year which included a minor claim. Most pissed off. Car has a tracker too but apparently that makes no difference. I'm with LV but my dealings on that 1 issue were not positive.

Kittyfrisk · October 2023

Kittyfrisk said:

Having just had my renewal, I'm now looking for quotes like many others.
Over 9 years NCB, low annual mileage, no accidents in seven years (last was a no fault), no convictions, cheap car etc.
Last year was £155.04 fully comp.
This year £408.07... FFS!

Update. Much time & swearing spent on various comparison sites & other insurer's that aren't on them & now have similar renewal cover at £288.78.
Interestingly all the sites had the same companies in the top 4 quotes, but all for differing amounts.
Also, the cheapest quotes were from Aviva Zero, Aviva, Quote Me Happy & General Accident. All these 'separate' firms are owned by Aviva...
No wonder they call it Confused.Com.

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