Insurance Companies - how are they allowed to get away with it?

[SquareDaff]

My car insurance is due for renewal soon so visited the usual comparison web sites.
Earlier in the year I'd needed to make a claim when someone backed into my car in a hosptial car park. Fortunately, they'd left me their name and number so I was able to fully claim on their insurance.

If I ask for quotes saying "no accident" my insurance is £390. If I mention the accident, even though it cost my comanpn nothing and the accident blatently wasn't my fault, the quotes go up to £460. Why are insurance companies allowed to get away with this and where's the incentive for me/anyone to actually tell the truth if they're going to rip you off anyway!!!

 

[the snail]

where's the incentive for me/anyone to actually tell the truth if they're going to rip you off anyway!!!

If you lie and they find out (and I think they would - the companies talk to each other), then you won't be able to claim on it.

 

[Scilly Suffolk]

You need an incentive to tell the truth?

A contract of insurance is entered into, by both parties, on the basis of "uberrima fides" or "utmost good faith": if you lie the contract may be declared null and void.

The differing quotes reflect the differing risks of insuring someone in two differing sets of circumstances.

It's difficult to see how anyone is being ripped off (unless you lie).

 

[ohnovino]

Can't believe I'm defending insurance companies, but...

They base their premiums on statistics. Drivers who've had accidents in the past are statistically more likely to make claims in the future, even if the past accidents weren't their fault.

 

[SquareDaff]

Each insurance contract has a "information provided is accurate" disclaimer at the bottom. I would always provide accurate info for the reasons you've both mentioned - my question was generic rather than specific. Not everyone is honest and some people will do this sort of thing if there is such a big monetary discrepancy.

Getting specific - in my 26 years of driving I've never had an accident (3 in total) that was my fault (touch wood) and in each case the full amount has always been reclaimed. So how do companies justify putting a quote up £70 (about 20%) for an incident that was again fully claimed. While I can understand the "risk" factor - looking at my history they should still realise it's negligable. If there's no incentive for "good driving" then why bother!?

 

[benb]

Because they can.

 

[MissTillyFlop]

Each insurance contract has a "information provided is accurate" disclaimer at the bottom. I would always provide accurate info for the reasons you've both mentioned - my question was generic rather than specific. Not everyone is honest and some people will do this sort of thing if there is such a big monetary discrepancy.

They might lie, but when the policy is set up, the insurance company automatically check the insurers' database, which has all details of all claims and reported incidents that were not claimed for.

So if you're not going to claim, don't go to the insurance company.

 

[XmisterIS]

I think the motor insurance industry needs to be better regulated - it can do pretty much as it pleases.

For example:

1) Why do they charge an inflated premimum for an extra two years, even after points on your licence have expired? Answer: because there's a law that says they can only go back 5 years. If that law wasn't there, then you can bet your *rse they would want to know about everything, right back to when you first got your licence - so that SP30 you got 30 years ago would still give them an excuse to screw more money out of you.

2) If you drive two vehicles (e.g. car and motorbike) and you claim on one, then you have to tell your other insurer too (which is fair enough). But if you have 20 years NCB and you insure another vehicle, it doesn't count - you go back to zero. I found that out when I got a motorbike - I have 15 years NCB on my car ... but only 3 years NCB on my bike. Licence to print money, licence to screw you out of every penny they can.

 

[SquareDaff]

They might lie, but when the policy is set up, the insurance company automatically check the insurers' database, which has all details of all claims and reported incidents that were not claimed for.

So if you're not going to claim, don't go to the insurance company.

In the last case it wasn't my choice. The person who hit me would have paid cash if the quotes had been reasonable. When they weren't it had to go through the insurance companies. I had a signed note along the lines of "It was my fault and I'll pay for any damage" - so fault was never in question.

My arguement is that the insurance companies have spent years building up a "drivers database". My 3 "no fault" claims in 26 years and a clean licence should prove I'm very low risk - and yet they still push my premium up £70 (20%) for mentioning the latest incident. It's unjust and should be illegal.

 

[MissTillyFlop]

In the last case it wasn't my choice. The person who hit me would have paid cash if the quotes had been reasonable. When they weren't it had to go through the insurance companies. I had a signed note along the lines of "It was my fault and I'll pay for any damage" - so fault was never in question.

My arguement is that the insurance companies have spent years building up a "drivers database". My 3 "no fault" claims in 26 years and a clean licence should prove I'm very low risk - and yet they still push my premium up £70 (20%) for mentioning the latest incident. It's unjust and should be illegal.

Well, we haven't had any claims at all and our insurance has gone up from £300 to £800 this year.

When we questioned this, we were told that it was due to "a large number of accidents involving uninsured drivers in our area". So it doesn't even matter if you have a clean slate any more, you are paying more because of other people!

 

[SquareDaff]

Well, we haven't had any claims at all and our insurance has gone up from £300 to £800 this year.

When we questioned this, we were told that it was due to "a large number of accidents involving uninsured drivers in our area". So it doesn't even matter if you have a clean slate any more, you are paying more because of other people!

Annoying isn't it!!
I'll just shop around for the lowest common denominator insurance every year knowing damn well that all insurance companies are deceitful weasels that will try to wriggle out of not paying should I ever need to make a claim!!!

 

[fossyant]

Insurance has gone up massively. Mine has doubled in the last 3 years despite low miles.

 

[swee'pea99]

Well, we haven't had any claims at all and our insurance has gone up from £300 to £800 this year.

When we questioned this, we were told that it was due to "a large number of accidents involving uninsured drivers in our area". So it doesn't even matter if you have a clean slate any more, you are paying more because of other people!

Re the OP, I think a previous poster is right - however unfair it may seem, the bottom line is that insurance prices aren't worked out by what's fair but by hard statistics. They don't have the time, or the skills, to consider individual cases; all they do is have a big program that gobbles up all the criteria and spits out an actuarially accurate number. If it helps, your past good record almost certainly *is* one of those criteria, and has helped keep the increase down.


Re up from 300 to 800 - no way! Never ever renew, always shop around, and never take the first quote you're given. Different insurers are in different situations at any given time - one may have excess capacity that it needs to get shifted, while another hasn't much capacity left, just now, so will up its quotes accordingly to choke off demand and make the best possible return from what it has. I have saved, literally, thousands over the years by shopping around - and I've never gone with anything other than a reputable 'name' company. (Don't go with the lowest quote without googling around - you invariably find that the *very* cheapest has a terrible rep when it comes to dealing with claims. But you can usually get Churchill or Admiral for a few quid more.)

 

[SquareDaff]

Insurance has gone up massively. Mine has doubled in the last 3 years despite low miles.

That's something else that bothers me - I've halved my annual mileage now I cycle commute. Surely that should half my risk (i.e. less time on the road MUST mean less chance of an accident - especially as the car is parked on the drive Mon-Fri in peak hours). Why isn't this reflected in the premium. Plus as a cyclist I'm still "reading traffic" so not getting rusty - in fact I'm probably more aware of (potential) hazards.

 

[Paulus]

When myself and Mrs P were on holiday in September, a bus clipped her car outside of our house. The driver left the details so no problem. When we got home the damage was so minimal that it was not worth claiming. Several weeks later MrsP got a phone call from Direct Line, our insurer about the claim. She told the insurance that she didn't want to claim as there was only one small scratch on the bumper. This is still going down as a no fault claim, even though she hasn't claimed. Because the bus companies insurer has logged the incident it shows up on the database, and they seem to expect you to claim, even when you don't want to.