Car insurance quotes !!

[subaqua]

Same here.

M&S were one of the cheapest last year, so renewed with them. This year it's jumped up by about 25%. check on-line, same prices coming up as last year. Call them back, 'Oi you are way too much' - bing, down comes the price.

Going through the same with the in-law's static caravan. My FIL has always paid the renewal via the 'site' - i.e. their recommended insurer. As we've now picked up the 'bills' I decided a little bit of phone calling (static caravan insurance is a little more tricky than cars - flood risk being near sea - like half a mile) - quickly find quotes 2/3rds of the price, saving £150 to £200.

Robbers the lot of 'em.

to be fair half a mile if you are on the plain from Rhyl Ruddlan Abergele is really close. I remember doing flood restoration in 1990 works close to the A55 which as crow flies was a mile and half from the sea.

admiral have done really well for me this week. Almost 12 months on from the tree squishing the car I called as we had heard nothing more about recovering the excess. Admiral put their hands up and said they hadn't performed as they should and sent us a cheque for the full amount.
still going to punt round when renewal is due.

 

[Paul99]

[QUOTE 2372075, member: 9609"]The government seems to be trying to address these issue with gas electricity etc. I feel the same controls should be brought into banking and insurance. As I said above, I probably benefit from the current situation, but feel a little uneasy about it.[/quote]

Impossible to legislate so it would never happen. How do you think the government could begin to address the individual risk element of insurance?

What most people are forgetting when they go online and find a cheaper quote, is that the cover you pay for and the service you receive are not the same between any two insurers.

If you think you are receiving like for like cover with the cheaper premium, read the policy wording, I can safely wager you the difference between the premiums will be reflected somewhere in the policy or with the service you receive. Call centre in India. Cheaper. Call centre in the UK. Dearer.

The problem with insurance is peoples perception of insurance. As has been mentioned before in this thread, if you pay your premium and don't have to claim then you think it is a waste of money. If you have to claim, it is because something bad happens and the claimant is therefore experiencing a negative in their life, this is often projected onto the insurer.

When what you think SHOULD happen when you have to claim doesn't, then it is almost always because you were not entitled to it in the first place (i.e. you didn't pay enough premium for it). It'll be in the policy wording.

 

[Paul99]

[QUOTE 2372441, member: 9609"]And what has any of that to do within anything I said ?
If you must quote me, at least read the bloody thing first.[/quote]
Errr..you said the government are addressing the issue with the gas and electricity and you would like to see them do the same with insurance.

I said that they can't, because it would be impossible for them to address the individual risk element that is the basis of premium calculation. I think that this is relevant and from it you can see that I read your post.

The rest of my post was of a general nature and not specific to you.

 

[MacB]

I said that they can't, because it would be impossible for them to address the individual risk element that is the basis of premium calculation. I think that this is relevant and from it you can see that I read your post.

to be fair we don't have individual risk calcs we just have an approximation but I agree piecemeal regulation would be a nightmare

 

[Paul99]

to be fair we don't have individual risk calcs we just have an approximation but I agree piecemeal regulation would be a nightmare

Agreed, we don't. I was thinking more along the lines of you couldn't have say 4 bands of insurance and fit everybody into one of those bands like they are trying to do with the energy companies, limiting the tariffs they can have.

 

[400bhp]

[QUOTE 2371862, member: 9609"]So how does your equation explain this;

All with Barclays Home Insurance

2008 - 167.99
2009 - 205.00
2010 - 237.95

so, not happy with the increase to £237, I go online and search for other quotes. I find that Barclays, are now offering me as a new customer £151.29. So I phone up the renewals line and explain the discrepancies. They immediately say, sorry about that sir and charge me the lower amount. No change in policy, or values or anything, policy number even remains the same.
[/quote]

You've just explained the equation.

 

[400bhp]

In your opinion why don't these companies bail out of the loss making activities and focus just on the commercial?

Insurance cycle. Some years they will make a loss, some years they won't. Some will bail, some will stay-those that stay make abnormal profits. new insurers come into the market. The cycle starts again.

 

[400bhp]

[QUOTE 2371885, member: 9609"]I don't think anyone has said it is a conspiracy to murder thier granny.

But their business model has been constructed in such away that the more vulnerable people in our society are clearly subsidising the more savvy by paying higher premiums. And that is wrong.

It is the same with the banks with their 'Reward' interest rates that revert to 0.1% after a year, and it is the same with the gas and electricity, those that are more savvy are getting a much better deal than the old and unwary. - And that is what I feel is so wrong about these giants of companies.[/quote]

define vulnerable.

Also look up selection risk and moral hazard.

 

[400bhp]

[QUOTE 2372631, member: 9609"]you must have missed this bit out

I never suggested for one second that the government set the premiums! When the same company can have such a vast difference in premiums, sometimes for the exact same risk, see my earlier post link, that is purely based on whether or not the customer is new or existing. These mechanisms are clearly unfair and too often penalise the old and unwary.[/quote]

it's not the same risk.

 

[subaqua]

So which insurance company do you work for?
As a layman, basic economics tells me that it might be a good idea to keep hold of your existing low risk customers.

right you understand risk. thats a start. and you understand that not all customers will be high risk. but calculating risk doesn't work like you would think it does.
its too complex to explain here but it is a hell of a model to try and understand.

and no i don't work for an insurance company.

 

[400bhp]

[QUOTE 2372642, member: 9609"]Yes it was - same house, same company, same residents, same values, even the same policy number. but nearly a 60% difference in premium.[/quote]

The insurer doesnt know that though. They can only assess an individual based on the information provided.

They partly attribute sticky customers to an increased risk (selection risk).

 

[Lee_M]

[QUOTE 2372642, member: 9609"]Yes it was - same house, same company, same residents, same values, even the same policy number. but nearly a 60% difference in premium.[/quote]

you missed "different year, different risk factors, potentially different location (and social ) factors"

as 400 says, they just do the maths based on the inouts at that particular time.

 

[Lee_M]

[QUOTE 2373171, member: 9609"]So lets expand on that a little - I'm sure you will let me know if I'm not understanding you correctly; If someone just renews every year no matter what, the insurance company may be saying to themselves "this person is not taking care of their money, therefore they may not take care of their property, therefore they are a higher risk and should have a higher premium".

So getting back to my experience as detailed previously link. The insurer kept loading my premium on the grounds that I was possibly stupid by simply renewing year after year, and not shopping around like a careful person would do; However the moment I phoned up and demonstrated that I was not that stupid after all, and had spotted what I would be paying if I was a new customer. They were quite happy to reduce my premium by 36% frpm £237 to £151[/quote]

no, what actually happened was after your first year special offer ended you were put on the standard tarriff, and when you phoned up they gave you a deal to keep your business

why is that so hard to understand?

all businesses do that

 

[Lee_M]

[QUOTE 2373251, member: 9609"]It was actually the third year - so how many 'special discount' years do you get before you reach the real price - or do they keep adding about 20% every year indefinitely?

Are you sure you don't work for an insurance company?

Anyway - bored witless with this thread now.[/quote]

so stop contributing, you seem to have a problem understanding basic business, I suggest you dont ever start your own

and no I don't work for an insurtance company, but as I said before I have worked for them in the past, if you want I can name them - but they're the bigger ones in the UK - that's why I know how it works.

You seem to think that because I am explaining how it works that I am defending them, I'm not I'm explaining how it works and pointing out that it works the same everywhere and not just in insurance - do your cycle magazine subscriptions costs the same for you as everyone else - well actually no - if you check out the ads you'll frequently see incentives to get new customers that you didnt get when you bought your subscription.

Phoning the insurance company just gets you the new customer discount again

It's not rocket science

 

[400bhp]

[QUOTE 2373171, member: 9609"]So lets expand on that a little - I'm sure you will let me know if I'm not understanding you correctly; If someone just renews every year no matter what, the insurance company may be saying to themselves "this person is not taking care of their money, therefore they may not take care of their property, therefore they are a higher risk and should have a higher premium".

So getting back to my experience as detailed previously link. The insurer kept loading my premium on the grounds that I was possibly stupid by simply renewing year after year, and not shopping around like a careful person would do; However the moment I phoned up and demonstrated that I was not that stupid after all, and had spotted what I would be paying if I was a new customer. They were quite happy to reduce my premium by 36% frpm £237 to £151[/quote]

No, you're confusing selection risk with moral hazard which (my understanding-srw could confirm this) is less of an issue in pricing.

The insurer is worried about customers staying with them because (in simple terms) the customer has an unfair advantage based on the individual's personal knowledge against the risk they are being priced for. So they load the premium to allow for this increased risk.

You're partially right, there is some element of cross subsidies from those sticky customers and non sticky customers and the different prices are not all down to different risk profiles.