I'll never figure out how insurance companies operate.

[400bhp]

So, how can they conclude that I'm a higher risk driver if 1) I didn't cause the accident 2) my car was parked 3) never had an accident / claim before 4) I'm not a high mileage driver (5,000 miles per year for the last 10 years) 5) I'm not in a high risk age under 25 or over 55....

My first statement is still valid in MHO Insurance companies aim is to screw their customers right, left and centre.

1. Already explained.
2. Already explained
3. Your past experience doesn't have a direct and full bearing of your future risk
4. Nothing to do with the particular point
5. Noting to do with it

As a general point, you are confusing your own personal specific circumstances with the wider remit of insurance to pool risk. They cannot cover every individual circumsnatce, be that a particular accident or a particular driver. Well, they could but the admin costs would be sky high and hence premiums would be huge.

 

[swee'pea99]

Have to say, while I sympathise with RRSDOL, 400bhp seems on the money. It may not seem 'fair', but insurance doesn't run on fair, just likely.

Many years ago I got rear-ended. In fairness, and in law, that was down to the guy who rear-ended me. It's up to him to not drive into people, period. But if I'm honest, if I hadn't let my mind wander a bit, to the extent that I suddenly found myself having to slam on the anchors because the guy in front of me had stopped suddenly, the guy behind would have had more warning, and might well not have hit me. Nowadays, I think, I'm a more attentive driver...I would have seen what was up ahead, and dabbed the brakes a couple of times, to signal to the guy behind 'we may be stopping soon'. That doesn't make it any less his fault, ultimately. But it does - if you're looking at 'averaging charts', make me more of a risk.

The parking one is even more glaring. 'How can they penalise me? I wasn't even in the damn car when it was hit!' Well, maybe it had something to do with where/how you parked. Maybe someone else would have looked at that space and thought 'probably better not'. Maybe not. Maybe your choice was impeccable, your parking too. Which means you're a victim of other drivers, who lack your care and foresight. But you are, fair or not, in the pool of 'people whose cars got hit while parked'. And that makes you a higher risk. It may not be 'fair', but it's the way the industry works. And as 400bhp says, it's hard to see how it could work any other way, apart from having every single claim investigated for 'fairness', which would be immensely costly.

The *real* scam of the industry is the way it relies so massively on inertia. I can't think of any other entire business that's explicitly built on the principle of screwing existing customers to finance getting new ones. But that's a different issue.

 

[Spoked Wheels]

1. Already explained.
2. Already explained
3. Your past experience doesn't have a direct and full bearing of your future risk
4. Nothing to do with the particular point
5. Noting to do with it

As a general point, you are confusing your own personal specific circumstances with the wider remit of insurance to pool risk. They cannot cover every individual circumsnatce, be that a particular accident or a particular driver. Well, they could but the admin costs would be sky high and hence premiums would be huge.

Yes I know you did but it doesn't make sense to me and I imagine that most people would find it very unfair. I call it daylight robbery.

It's like a judge sending aggressor and victim to jail because the victim is likely to be victim of aggression again.

 

[400bhp]

I tried.

If it still doesn't make sense then someone else will have to educate you.

 

[ASC1951]

The *real* scam of the industry is the way it relies so massively on inertia. I can't think of any other entire business that's explicitly built on the principle of screwing existing customers to finance getting new ones. But that's a different issue.

A different issue, but it is at the heart of the problem. All we need to do is get off our arses and change insurers when we don't like the renewal quote, just as we should with banking, utility supplies and most other subscription services. I don't see it as a scam when a supplier charges lazy people more, any more than it is a scam for Jet2 to charge vain people for a 'priority boarding channel'.

I've dealt with insurers personally and professionally for 30 years. In my experience they are as honest and straightforward as you can expect of any business which is subjected to a significant proportion of dishonest declarations and dishonest claims. My Top Tips:-
- like most people, if you approach them with the attitude that they are crooks and charlatans they are not going to fall over themselves to help you
- anyone who trawls round the internet to find the narrowest cover at the lowest possible price will get the service that they pay for.

 

[Maz]

My car was hit by a taxi, no damage to the bodywork, but the rear light cluster smashed. After getting nowhere with the taxi firm, I bought & replaced the light cluster myself. My insurers raised my premium, I'd never made a claim, I'd made an enquiry in which I specifically told them I was not making a claim. To them, that is a "claim".

On the other hand, I once had a car stolen, 2001 I think, I submitted a claim for £3000 and received a cheque for £3200.

What was your enquiry about? A hypothetical scenario in which you were hit by another vehicle?

 

[colly]

So what were you trying to demonstrate with your unsuccessful attempt to use smoke and mirrors?

No. Just showing you can justify any old bollocks with figures.

 

[Nigel-YZ1]

All I know is that no renewal has ever been less than the previous premium.
That's why I have a growing Meerkat collection

 

[asterix]

I'm not sure anyone here doesn't understand that insurance companies are commercial bodies and need to make money. It strikes me that what people really don't like is the way they weasel out of claims using small print, often underpay claims which are quite justified and bitch all the time about how hard up they are. Their pricing is about as transparent and straightforward as a Brian Rix farce.

In fact the origin of insurance was not in profit-making activities. Groups of traders who were undertaking risky venture clubbed together and subscribed to a fund that paid out if a member suffered losses due to, say a shipwreck. Not unlike building societies where members clubbed together to provide funds for house-buying.

Up to recently many were still mutual organisations, eg Norwich Union but most now have been taken over by commercial organisations that do have investors demanding a profit*.

The risk assessment is done by actuaries who are highly skilled mathematicians so it's hardly surprising if the average punter gets left behind by their reasoning. Stochastic analysis would just be the start of their problem:

In probability theory, a stochastic process /stoʊˈkæstɪk/, or sometimes random process (widely used) is a collection of random variables; this is often used to represent the evolution of some random value, or system, over time. This is the probabilistic counterpart to a deterministic process (or deterministic system). Instead of describing a process which can only evolve in one way (as in the case, for example, of solutions of an ordinary differential equation), in a stochastic or random process there is some indeterminacy: even if the initial condition (or starting point) is known, there are several (often infinitely many) directions in which the process may evolve.

In the simple case of discrete time, a stochastic process amounts to a sequence of random variables known as a time series (for example, see Markov chain). Another basic type of a stochastic process is a random field, whose domain is a region of space, in other words, a random function whose arguments are drawn from a range of continuously changing values. One approach to stochastic processes treats them as functions of one or several deterministic arguments (inputs, in most cases regarded as time) whose values (outputs) are random variables: non-deterministic (single) quantities which have certain probability distributions. Random variables corresponding to various times (or points, in the case of random fields) may be completely different. The main requirement is that these different random quantities all have the same type. Type refers to the codomain of the function. Although the random values of a stochastic process at different times may be independent random variables, in most commonly considered situations they exhibit complicated statistical correlations.

Familiar examples of processes modeled as stochastic time series include stock market and exchange rate fluctuations, signals such as speech, audio and video, medical data such as a patient's EKG, EEG, blood pressure or temperature, and random movement such as Brownian motion or random walks. Examples of random fields include static images, random terrain (landscapes), wind waves or composition variations of a heterogeneous material.

*me, for example.

 

[mr_cellophane]

My brother moved house and now keeps his car in a locked garage as opposed to the driveway, his insurance went up by £100, go figure!

I asked abouth that and was told it was because people scrape their cars getting them into and out of a garage.

 

[Kiwiavenger]

this thread is full of interesing viewpoints!

working for an insurance company that takes pride in is customers and its awards (rated for buy customers) and one that rewards loyalty is good.

I've worked for insurers before where we've been told to not pay out on claims for something trivial (the one that sticks in my mind is a car skiding and hitting a stationary car because the tyres where a bit bald) and then apply harsh terms at renewal. my experience of the pricing structue is not great for other companies but know from exerience that a lot of cash ismade up on Admin fees! i changed to a lower rated car (1.6 escort to a 1.3 8V fiesta), removed a young driver and as told it was a litte extra, the paperwork showed a £45 admin fee!

give me a mutual any day of the week! even without working for one they worked out the best value for money when you include all the extras you have to pay for elsewhere and te one im wth dont charge you extra to change.

 

[Spoked Wheels]

I tried.

If it still doesn't make sense then someone else will have to educate you.

You don't need to be so bloody arrogant, do you?

According to your explanation

"There is some statistical evidence that shows that if those involved in a no-fault accident have a higher propensity to claim.

It could be because they are the type more likely to claim. It could be because they are a little more careless where they park."

How can I make sense of such statics? If I jumped a red light then I could understand or if I was speeding. Then I would accept that statics could show a higher risk. Not having any records of accidents or claims, how can the conclude I represent a higher risk? Are they going to tell me that x number of people that were reading a newspaper in the passenger seat while parked in a shopping centre car park went on to claim again?

You seem to try to be too clever and arrogant because you know how these insurance companies work ( that in itself is very bad attitude to have) and yet you have not given me a good explanation. You said "it could be because I'm the type more likely to claim" but that was my first ever claim I would have thought I was the ideal type of guy to insure. You also said " It could be because they are a little more careless where they park." well, that must have been over 200 drivers at the very same time being a little less careful in picking the place to park. Only me with the bad luck that an old lady wanted to park next to my car.

As for "There is some statistical evidence that shows that if those involved in a no-fault accident have a higher propensity to claim" Higher than whom? Only those that have never made a claim I guess.

The following is not a joke:

My wife called me just before I started typing this reply to ask for advise..... she was with my daughter in law and grandchildren. Daughter in law left the car parked and when they returned they found the car next to hers damaged one of the doors of my daughter in law's car, as the driver tried to squeeze into a space too small. They had taken pics and videos of the damage and paint marks. I said.... "run, run for your life "

 

[glenn forger]

This helps explain it:

http://www.confused.com/car-insurance/articles/car-insurance-courtesy-cars-and-non-fault-accidents

 

[Pale Rider]

I've often heard insurance companies claim there is no money in motor business.

If that is so, why do they advertise so heavily to get it?

 

[asterix]

The money is in the returns when they invest the premiums on the stock market or wherever. Also it gives them a database for selling other forms of insurance such as life and house.

Of course more money is to be made and lost in banking and there was a trend for insurance cos to merge with banks - bankassurance was one form. Luckily the banks came a cropper before they could get their sticky little fingers too far into that one. The idea of the insurance cos with all their control over pension funds, etc being owned by banks is not a rosy one.