motor insurance rant

> if insurance companies didn't play this silly game with renewals they could keep their own cost's down

Insurance is an odd business where the normal rules of competition don't quite apply in the same way. Renewals are a good illustration of this dynamic.

Year 1: insurers A, B, and C all charge about the same and all have about a third of the market.

Year 2: insurer A increases renewal prices. Some customers stay and some leave. Because A's old customers are paying more, new customers can be charged less.

Year 3: B and C have a problem. If they stick to their old method, they are now more expensive than A for new customers. In addition, their old customers are eyeing up A and thinking about switching.

Year 4: all three insurers are now charging low prices to new customers and high prices to old customers. No one company can stop doing this alone or they will get no new business.

In fact this dynamic applies to almost every feature of an insurance policy. I am sure a few readers here remember when insurers started introducing smoking and non-smoking rates and how quickly the whole industry adopted them: they had to, otherwise they were too expensive for non-smokers, and therefore ended up with only smokers - who of course claim more.

The only solution to these dynamics is mutual agreement, which isn't permitted under competition law, or government or regulatory diktat, as with the abolition of gendered pricing or last year's imposition of renewal pricing rules.

I thought this had been banned, they have to offer same price to ne and existing. How you'd police this is interesting, but I suppose some 'secret shopper' scheme could by set up.

If you lot are griping about a few hundred quid you should try living inside the M25. I thought this thread was going to be about the rip off of nobody driving anywhere during lockdown and yet paying more.

And on the subject of insurance in general all the ME clubs that didn't do any public running or other insured activity yet still didn't get a rebate. My men's shed got a whole 2 months free after not meeting or doing anything for six months.

My Tesla's insurance renewal is coming up. Last year it was £401 with LV. Their quote through the post was £502. An online comparison site gave me assorted cheaper quotes including one from LV for £398. Second cheapest was from the RAC @ £319 - underwritten by LV. Fiddling with figures for 'extras' ended up with £337 but also a reduction in voluntary excess from £500 to £250 with a promise from the comparison site to give me £250 towrads that if i had to claim.

The combinations of continually having to check comparison sites and those Co's not on them for every utility and insurance as well as the time wasted listening to phone calls listening all the disclaimers and options for button pressing and then being held in interminable queues if you need to speak to utilities, banks, insurers, doctors and others probably explains why this country is low on productivity scales.

My wife has been trying to register some trusts via the gov website. So far 5 days of sessions of over an hour each have failed. She starts through Gov gateway then onto the second gateway entering data to get automatic call-back phone confirmations that it’s her. Then finally starts to make the appropriate trust entries to find either the site times out while she’s still entering stuff or puts itself into a continuous loop of 'processing'..

Emails to the help desk came back with 'site is busy' then next time 'we have a problem' followed by the problem is resolved, followed by other error messages but no-one to actually talk to to resolve the thing. A complete waste of time. Currently, we get data mismatch errors probably due to the site's previous corruptions of attempted entries.

My RAC quote is due soon, will be interesting to see if it has gone up the usual 20% which I then have to negotiate down.

Tony

I too had trouble with the trust website. Correct data entered from the trust document was flagged as not complete when attempting to progress to the next set of data . Finally found the solution . Complete the rest of the data then go back and delete the data that was "processing" and put the same data in the same places . What a wonderful system !

Brian

And we all know America doesn't have State sales taxes

I had an interesting experience last week while renewing my car insurance. A renewal quote came through the post about 15% higher than last time so I phoned up and try to get some discount.

Not a big reduction was forthcoming so I was able to quote the companies on-line price and the lady said she would meet it, but I countered with less and said "every time you give me a derisory discount I will lower my offer" This threw her completely and she said "OK I will give you £20 off the on-line price"

I of course accepted and considered that it was 10 minutes well spent!

My new three year quote from SAGA informed me that the policy had been increased by more than 50%. Just finished the sixth year with no claims. I quote :-

"New Financial Conduct Authority pricing regulations introduced on 1st January 2022 ensure price equality for renewing and new customers. So, while some existing customers may find their price goes up, the GOOD news is your price will be the same or lower than a new customer who starts a policy in the same way you did".

OK., this is a house and contents policy But I'm sure the FCA regs may be tried to be used on motor insurance.

After a 'Conversation', New price is now LESS than past quite of three years ago for same cover.

Regards Ian.

Edited By Circlip on 25/08/2022 10:48:43

My car insurance renewal came in at 70% more than last year. Seems that i was loaded due to a minor coming together of mirrors - just a few hundred pounds, and I didn't even make a claim. All this despite having protected no-claims bonus.

Needless to say that i didn't renew, but went to a comparison site and found a better insurance for less than I paid last year - and a £20 Halfords gift card as a bonus. It pays to look around.

Hi All, nearly fell of my stool earlier this year when I got the renewal from LV for my 2018 Ford Ranger XLT. £14 cheaper, now what's that all about? Not complaining as you might have guessed. Can't remember the actual premium, but it was less than £300.00.

A few weeks back I got caught by a manned speed camera on my way home from the college I taught at on my motorbike. Having a quiet rant with some students the next day they were saying 'Oh you must have been going fast Sir!' I just murmured at that point not really wanting to say I was doing 47 mph in a 40 limit! A question of image!

The interesting thing was that when I told the bike insurers I has SP30 and 3 points on my licence my premium did not go up. My car premium was the same - no change but my wife's insurance on which I was a named driver did go up. That led to some long and pointed silences at home for a while!

Edited By Nick Clarke 3 on 25/08/2022 15:39:51

Just make sure you don't leave buying your insurance too late . If an isurer know you need the insurance yesterday the price will sky-rocket . If you have time to shop around and put the start date say in a fortnights time you get a better quote . We , my wife and I found out the hard way .

That worked here today - fill in all the boxes then delete them all and repeat with exactly the same data. Carp system!

Just make sure you don't leave buying your insurance too late . If an isurer know you need the insurance yesterday the price will sky-rocket . If you have time to shop around and put the start date say in a fortnights time you get a better quote . We , my wife and I found out the hard way .

The sweet spot used to be 3 weeks prior but some guys on one car forum have found that's a bit more variable and nearer a month now. In my case I’d done a quote 5 weeks prior and got good results -had to lie about start date cos they only go 1 month ahead - but then edited the start date on the quotes that were returned.

It's like haggling in the souk

pgk

Saga have just asked me for a 25% increase on the house insurance, I'll be going elsewhere.

I cannot remember the last time I saw an insurance quote less than £150. It must have been at least 30 years ago. Currently one is around £650 and the other £380. The first of those is limited mileage (8000).

Colin

Perhaps the tactic of saying give me your best price for a renewal and if I like I will stay, I think Alistair is a good negotiator perhaps we should all practice the art of a good haggle.

Mike