Car Insurance

[jellytable]

AIBU to think car insurance is not making sense. It seems fraudulent that a small ding (my fault) has resulted in a claim for £3700 (more than the cost of the other car) and my insurance going up by £1000 even with 20 years no claims protection. The cost of the claim was mainly the hire car. I kind of wish I hadn't been honest and left a note saying I'd done it, it has certainly made think I might not if it ever happened again.

Are the insurance comparison sites the best places to try to get a better deal going forward and is it worth considering a monitoring box/app or is that an excuse to rip you off too? What is the point in the no claims protection thing if it doesn't stop your insurance going up?

The protected no claims bonus aspect of your insurance is to stop them being stepped back in the event of a fault claim. You will still have a load on your premium with a fault claim unfortunately

I use GoCompare every time my car insurance is due for renewal. It’s a faff to change but always saves money.

All insurance companies are robbing bastards though. My policy went up after a claim where I was declared not at fault. Seems unfair, but apparently I deemed “higher risk” if someone drives into me?!

I think it’s common place with minor prangs to ask the other driver if they’d like to settle it without involving insurance.

My neighbour scraped my car and offered me cash which I gladly accepted. I won’t go through the insurance unless I have to.

What would it have gone up by if I didn't have an immaculate history and no claims protection? My insurance was £250 not to many years ago. Now it's probably going to be £1500+ just like when I was a teen in a sports car!

As much as everyone likes to pile on car insurance companies they aren't a rip off really. They run at a loss (pay out more in claims per year than they get in in premiums) and any profit they make is dependent on investing your premium between the time they are received and claims paid. In a way they could be seen as quite a nifty money saving service as the profit isn't at anyone's expense.

Premiums are calculated as a percentage of risk you represent to the overall pot. Clearly after a £3700 claim (not insignificant at all) you are going to be a worse risk, statistically once you've had a claim you are more likely to have another one unfortunately. As far as your insurer knows maybe there were hidden health/ eyesight problems at play. This will come down over the next five years if there are no futher claims but is a bit of a waiting game I'm afraid.

The worst case for an insurer is an accident where someone causes lifelong injuries to a person, these costs far exceed anything the insurer is paying out on the value of cars and will be what the increased premium is representing. There is also a sizeable increase generally for all policies this year due to inflation, same as everything we buy, so some of your increase will be this. Car insurers ran a huge loss last year (109% loss ratio- 100% is where they break even on claims paid out and premiums in) so all premiums have had to go up.

Comparison sites and brokers and shopping around is your best bet. The most favourable premiums will come for you from insurers targeting those with claims history who can see the nuances that make you less of a risk for them. It's always a good idea to use at least three sources as some are affiliated with certain insurers and may have deals with them. Also try and search around two weeks or more ahead of your renewal date.

I'd be open to a telematics box if it works out cheaper for you, although these are usually more beneficial for new drivers.

Unfortunately you are required to declare any prior accidents, even if you didn't claim....

What is the point in the no claims protection thing if it doesn't stop your insurance going up?

it protects the discount.

example:

5 years NCB = 70%. 3 years NCB = 50%

base premium £1000
price paid with 5 years NCB £300

after accident:

base premium £1500
price with protected no claims £450
price without protected no claims £750

The thing with no fault claims is statistically having one you are more likely to have others, fault or non fault. The data isn't personal, there are huge databases of information that says this is the case.

It makes more sense if you think of it as some non faults would be caused by less than ideal driving, but fault went to the other car because they had hit you from behind when you did something they weren't expecting. Or it might suggest your eyesight or reaction times might not be as sharp as other drivers who may have reacted in time to avoid a collision, even though the other car caused it.

I appreciate how annoying it is though. Ours went up following a very obvious cash for crash set up. The system isn't perfect but its reliant on a rather cold calculation of risk by a computer for the most part.

Hence being called Protected NCB.

Loving all the PR from Insurers. Mysterious statistics that "prove" if someone runs into you, it was your fault 😂
What a laugh.

They are all robbing bastards end of.

Yes you've had an accident. Someone who hasn't had an accident doesn't cost the insurance company money...... doesn't matter if it's your fault or not.d

Facebook local pages are full of people asking others to own up to damage, I now understand why they drive off. I think my conclusion is that insurance companies are robbing bastards.

Majority of car insurers make no money.

@FFSWhatToDoNow I'm pretty sure they do

amp.theguardian.com/money/2023/aug/16/admiral-profit-up-4-despite-insuring-380000-fewer-vehicles lucky you are with admiral

A viva www.aviva.com/newsroom/news-releases/2023/03/FY2022-results-announcement/

Thieves.

Premiums are supposed to have increased versus last year, even without a claim. I have seen reports in the news recently of increases up to circa 70%. I have recently renewed via a broker and have found no increase in premiums and found them to be cheaper than going direct (although I have a pick up which are different to insure than a car)

From the first article posted.

Insurers make big returns by using policy money to invest in interest generating assets elsewhere.
It’s not just the underwriting profit of “insurance money in- claims money out”

Are you aware that most insurers don't just do car insurance? They can have taken a battering on motor whilst still making money overall.

@Barleysugar86 explained it really well. I'd also add that claims suggest you may be driving in places where accidents are more likely to happen which makes you a bigger risk.

Are we all supposed to be feeling sorry for car insurance companies and suck up the enormous hikes in price every time our policy is renewed because the poor things aren’t (allegedly) making any money?

Every year I can shave at least £100 off a renewal quote by changing my insurance provider.
My husband also managed to get his renewal quite reduced with AXA simply by ringing and haggling on the phone.

Search around for a better deal op!

Car insurance as an industry pays out more money on car insurance than they get given. This is a fact. That is an odd definition of a thief?

The Aviva results show a core operating ratio of 94.6% for all business, since it's been posted above. So they have made a profit overall over all lines of insurance, as 100% would be their break even.

From their website Aviva provides the following insurances- car, van, breakdown, home, landlords, tenants and renters, life insurance, critical illness cover, income protection, health, personal accident, travel, business insurance. They have made a profit over all lines of business for the year yes.

What COR would you consider would be acceptable for an insurance business if you feel paying out 95% of its revenue in costs is unacceptable? Because if it hangs around too long at the 100% or more point I assure you it won't remain a business for long.

All this is a moot point really I just find it funny insurers are losing money on car insurance, undercharging everybody, and still getting slated for it. Car insurance is actually very good value for money! Mobile phone insurance, freezer contents, extended warranties and fabric insurance for sofas is where the real con is if you're looking.

Meh from experience II’m not getting a “good value” vibe from any insurance company I’ve used.

Example 1- to change my surname on my policy (online) after getting married? I was charged £45 for “making a change”

Example 2-I was a victim of a car park scam. My reg plate was given in a fraudulent claim alleging I smashed into another stationary vehicle and drove off.

I took my insurance Co. over 2 YEARS to “investigate” and declare my non involvement despite there being CCTV footage and proof my vehicle was completely undamaged.
I was paying a 60% increase in premiums for 2 years. Was I refunded when the case proved I wasn’t involved? Was I heck.

Example 3- It takes on average 1 hour on hold to get through to my current insurers. More than once I’ve had to terminate the call because the call handler is working from home with crappy equipment and you can’t hear a word they’re saying.

Agree. I could cite many issues but it's just not worth typing. Who pays out thousands of pounds on car hire for a two day max repair. Total fraud.