Are insurance companies "At it"?

[6CylinderMerc]

I was pondering this one the other day.

You're supposed to tell your insurance company if you make any modifications to your vehicle like fitting spoilers, alloys, etc. They will then re-calculate your premium & increase it for you. Why should this make any difference? I can understand it with engine / power upgrades but manufacturer supplied alloys? Especially ones that can be ordered as a factory extra. To me that's just making money for the sake of it.

Now I can hear the warnings of "If you need to claim then your insurance can be invalidated if you don't tell them". But, if it's factory fit extras like different alloy wheels & you bought it used with those already on it, how would they know? Answer - They wouldn't even notice, they're just "At it".


Whilst I'm on a whinge about being "At it", another gripe I have is with the renewal.
Here's a burning question - Why does your premium increase every year yet you are more experienced at driving, you have another year without a claim & your car is older & is worth less thus presenting less financial risk to the insurer??
I got mine through last week & it was more than double the cheapest like for like quote I got elsewhere. They obviously rely on loyalty & exploit it.
Well, they didn't exploit me. Better cover including RAC recovery for £100 less . I gave them the chance of matching it but the insurance dog said "Oh, no no no no no" . 'Bye Churchill.

 

[television]

Sadly you often have to shop around at each renewal to keep the price down,,I think that they work on the principle that most do not bother, and they get away with it

 

[BTB 500]

You're supposed to tell your insurance company if you make any modifications to your vehicle like fitting spoilers, alloys, etc. They will then re-calculate your premium & increase it for you. Why should this make any difference? I can understand it with engine / power upgrades but manufacturer supplied alloys? Especially ones that can be ordered as a factory extra. To me that's just making money for the sake of it.

First of all, external (cosmetic) mods. may increase the risk of the car being stolen, by making it look more valuable/desirable. Alloy wheels themselves get stolen far more often than steel wheels. OEM Xenon (HID) lights are far more expensive to replace after a minor front-end shunt than standard lights. AMG bumpers/skirts etc. will be much more expensive to replace than standard parts if damaged (or stolen). Get the idea?

Second, remember insurance companies work based on statistics. It's possible that statistically people who modify their cars are more likely to make a claim than those that don't ("car enthusiast" may imply "enthusiastic driver"). If this is the case, the fact that you've modded the car will flag that you are a higher risk. In which case you can expect to pay a higher premium.

 

[Rory]

I do think (and it's particularly relevant for owners of cars like MB, BMW etc) that the insurance companies have an unlcear attitude on modifications and options.

Most seem to ignore options completely, which on our kind of car, could make a pretty big difference to the cars value. Yet for the same thing fitted as a mod, they would bump up the premium.

 

[BTB 500]

I suspect most people simply don't realise they're supposed to declare factory options. Of course the average 2nd/3rd owner may not know what is an option and what was standard anyway.

 

[Rory]

I suspect most people simply don't realise they're supposed to declare factory options. Of course the average 2nd/3rd owner may not know what is an option and what was standard anyway.

I asked when I insured my car after hearing stories that Admiral will only replace the standard vehicle. I'm insured with Frizzell (Liverpool Victoria) and they said as long as it was factory fitted then it was covered.
I even got them to write to me to assure me COMAND was fully covered (as the policy says £500 limit unless part of cars original spec, and I really don't fancy the £3K bill for a new one if it gets nicked) and they wrote and assured me it would be covered.

 

[television]

I asked when I insured my car after hearing stories that Admiral will only replace the standard vehicle. I'm insured with Frizzell (Liverpool Victoria) and they said as long as it was factory fitted then it was covered.
I even got them to write to me to assure me COMAND was fully covered (as the policy says £500 limit unless part of cars original spec, and I really don't fancy the £3K bill for a new one if it gets nicked) and they wrote and assured me it would be covered.

They normally take the whole car

 

[talbir]

Firstly, if the car comes with alloy wheels/ground effects from factory, then there is usually NO loading on the premium - you must simply state whether the modifications are factory or after the event and there is no need to declare what factory options there are. Cars like AMG E55 will already belong in a specified insurance group so there will be no additional loadings.

Secondly, if they are after the event, then you need to give them dimensions of items like alloy wheels - the premium will only be loaded if the alloy wheels you have put on are a greater width than the factory alloys.

Insurance premiums increase year-on-year simply as a result of many factors - the high number of uninsured driver claims, the high number of fraudulent claims, increases in cost of car and NHS recovery costs.

Insurance claims from accident damage are not the claims that hurt insurers - it's those involving bodily injury, like tetrapleigic that drive up the cost. In such cases awards must be made to the third party that cover the cost of future care and lost earnings....so factor in wage inflation at circa 3% and social inflation at circa 3-7% on top depending on the severity of the claim.

Cheapest insurance premiums can generally be misguided - it's all about the level of cover one is getting and t's important to compare level of coverage rather than just compare price.

Last but not least, all insurance companies also buy insurance (called reinsurance) to cover themselves against the large claims (quadraplegics, Selby etc) ...the reinsurers generally charge more and more each year as well and insurance companies simply have to pass on these costs.

Unfortunately, those of us who have claim free years and are better drivers with the increasing experience etc, suffer due to the number of people who make fraudulent bodily injury claims (whiplash) and fraudulent accident damage claims (vandalism when no such event took place). Hard to blame the insurance company for the increases arising from such claims.


cheers
talbir

 

[robert.saunders]

Result - my renewal this year with DirectLine was lower than last year! Altho' I think they may have first renewal discount

 

[DansSlk]

I'm with MB Insurance (not sure who they actually are tbh) the quote was good even for a young driver and with some AMG's to get insured.

Made a school boy error on the SL by not checking the windows where fully up and sure enough water got in, thought what the hell i will use the insurance its what its there for and they where very good i explained the situation to them and they where basically happy to write me a check thing is i decided to just try drying the piece of kit out properly and sure enough it popped back into life so i get back on the phone to the insurance and say forget about it and again that was fine.

Insurance renewal arrived and I've lost my NCB, now fair enough technically i did claim but no money was ever paid out the claim was canceled way before that stage.

Live and learn right

 

[6CylinderMerc]

I was very careful to check like for like on cover & not just on price. Every year my renewal premium goes up with whatever current insurer I'm with yet if I shop around I can get identical cover for less. This year I even got better cover for less - go figure . I figure the same as what was posted earlier - They simply rely on the fact that a lot of people won't bother to get a quote elsewhere, in other words, they're "At it".



That claim that was cancelled yet you lost your no claims bonus is harsh. You should argue that one.

 

[crockers]

I'm with MB Insurance (not sure who they actually are tbh) the quote was good even for a young driver and with some AMG's to get insured.

Made a school boy error on the SL by not checking the windows where fully up and sure enough water got in, thought what the hell i will use the insurance its what its there for and they where very good i explained the situation to them and they where basically happy to write me a check thing is i decided to just try drying the piece of kit out properly and sure enough it popped back into life so i get back on the phone to the insurance and say forget about it and again that was fine.

Insurance renewal arrived and I've lost my NCB, now fair enough technically i did claim but no money was ever paid out the claim was canceled way before that stage.

Live and learn right

Dan I would fight that .... you should only lose your NCD (note it is a discount and not a bonus) if you make a NON RECOVERABLE CLAIM...as yours doesnt fit into that category you should have had the discount .. fight it as I am sure it is just an admin error....

 

[DansSlk]

Thanks guys, It was a while back now but i will certainly have a word with them about it and see what can be done.

 

[Dryce]

Insurance premiums increase year-on-year simply as a result of many factors - the high number of uninsured driver claims, the high number of fraudulent claims, increases in cost of car and NHS recovery costs.

Utter nonsense. These are base costs on the industry. They do not necessarily go up every year.

At the same time every year a driver gets older and for a high proportion of drivers insured the value of their vehicle goes down which caps part of the risk.

Funny thing is if you shop around each year it doesn't seem to go up or if it does it goes up by less than if you didn't shop around.

 

[talbir]

Utter nonsense. These are base costs on the industry. They do not necessarily go up every year.

At the same time every year a driver gets older and for a high proportion of drivers insured the value of their vehicle goes down which caps part of the risk.

Funny thing is if you shop around each year it doesn't seem to go up or if it does it goes up by less than if you didn't shop around.

Please explain how the base costs do not rise each year, since you refer to it as utter nonsense you must have some justification to back that up ?

Your point about car value depreciation reducing cover does not stack up - the cost of claims which hurt insurers (and influence the premium) are the bodily injury claims....a 75k SL being written off doesn't hurt them....a 5m quadraplegic claim is what hurts....insurance that is compulsory is third party...third party does NOT cover your vehicle in the event of an accident which is your fault. Comprehensive insurance does, but comp cover is not compulsory by law. Car value is a factor but not that critical since the major cost of cover is the third party element.

Shopping around might reduce insurance cost - but it's only a valid reduction if you are getting exactly the same level of cover for that reduced price. You get what you pay for in insurance.

talbir

 

[Carrotchomper]

I was pleasantly surprised to receive my renewal premium this year- It turned out about a third cheaper than anything I could find on tinternet, and about £50 less than last year. The cover looks to be as comprehensive as lasy year!

 

[Dec]

Sadly you often have to shop around at each renewal to keep the price down,,I think that they work on the principle that most do not bother, and they get away with it

Bang on. Its all Confusion Marketing, the keep changing the prices, you get fed up and pay up. If one particular company were the cheapest insurer, everyone would be with them.

Dec

 

[DaveK]

Got a renewal quote today from an insurance company who I have been with for 2 years now. ( not car insurance )
To be added to the yearly premium is the figure of £ 10 which is down as ' renewal fee '
So it's ' thank you for staying with us and by the way, we are charging you a tenner for the privilege of being our customer " !

 

[hawk20]

I agree with Talbir on this one. Costs do rise over tiime. The cost of repairs. Some years the number of accidents. Don't forget the huge number of flood related claims last year. There has been a big increase in uninsured drivers too -some from abroad , some from home.

And it is not true that premiums rise every year as numerous threads show. Some go up. Some don't. We are with Liverpool Victoria and they are very fair and the increases have been non existent or very modest.

One new extra cost for insurance companies is so many people using comparison websites who charge the insurance companies the equivalent of £50 for each successful referral. That is why Direct LIne won't use them. Middlemen are very rarely if ever free.

 

[Chris_J]

I had my renewal come through, £88 more than last year, and I think over £100 more than the cheapest I could find.

Called my insurer up and asked if they could do anything with the price, sure enough I got it for £11 more than the cheapest. It wasn't worth the hassle of changing for £11 so it's always worth giving them a call about the price.