Insurance companies. how do they work it out?

[pgarner]

Well my car insurance is due at the end of June. Rather than wait for the renewal to drop through the letter box and see how much they want to take of me this year i thought id start early on line.

checked out my current insurer ( Bell ) with my date of birth set to 27th rather than 26th as it shows as i already have a policy with them and need to call.

Price £502 down from around £650 ish. thought that was good for the extra years no claims and being a 10 month older.

then went to money supermarket and done the same ( same DOB, 1 day out ) gave them the same details

admiral came out on top with £430, but more info needed
next was Auto direct with £924 :sad2:
worst was yet to come scrolling down through the list 36 out of 71 were willing to give me insurance M & S was the most expensive at £3823 :amazed:

the other 35 most were not willing to give insurance due to the age of the main driver
funny thing was bell said they wouldnt insure me for the intended use of the vehicle ( business class 1 ) yet gave me it on their on page and a current customer

so went to admiral and made a new quote ( more info put it up to just over £500 ). put in my correct birthday this time along with everything the exact same £448 a year.

How do they work out the risk ? and if they all run from the basic idea or age, experience, mileage and car insurance how come i managed to get it for an 8th of the price of 1 insurance company ?

 

[obi_waynne]

Here's a brand new article - just for you.

http://www.torquecars.com/articles/calculating-insurance.php

Basically they all look at their stats (which vary) and determine how much each driver will cost them. Each insurer will have different experiences with the same groups of drivers. Plus they have thier own profit margins and costs. If they don't want to cover you they will give a very high price rather than decline!

 

[pgarner]

cheers

 

[sbtUK]

It's also worth mentioning that different companies specialise in different things. For example: one company might provide cheaper than average car insurance for people over 25. They can afford to do this by making it more expensive for anyone under 25 to get insurance with them. Or another company can provide cheaper insurance for women by making it more expensive for men.

If an insurance company can make sure they are the cheapest for at least a few groups of people (Women, people over 25, people over 75 who drive Golf GTIs): then they can pretty much guarentee that they will get at least some business. That's one of the reasons there's so many insurance companies to choose from, I think.

I'm just reading through Waynne's article now. I'm sure it's a lot more in depth than my little bit of input

It's one of the reasons that it irritates me when the subject of car insurance comes up and someone with a completely different car, of a different age and gender says something like "Oh, you need to go with <insert insurance company here> because they were the cheapest for me!"

 

[obi_waynne]

You're not wrong sbt! I spend too much of my life working in insurance so I used to get this a lot.

 

[HDi fun]

No underwriter really likes car insurance as there's really no margin in it at all. They just accept that everything would grind to a halt without it. Including their own other business interests.

I think 3rd party liability should be done through a central agency, much like road tax, perhaps the same one even.

If you then want to take additional cover for your own vehicle, the comprehensive bolt-on, if you like then this could go to traditional insurers.

 

[obi_waynne]

I'd be contributing to high risk drivers Third Party liability! I don't fancy that - I would be up for it big time if I was 17 with a Nissan Skyline

There is the MIB (motor insurers bureau) which all insurers contribute to which deal with injury claims from un-insured drivers.

If you agree to post a bond (it was around £30,000 when I started an insurance law course) the road traffic act will permit you to actually drive without insurance and let the bond provide indemnity. (It needs to be properly managed though so no driving without insurance and saying "I have £30k in the bank".

 

[pgarner]

Ok recived my renewal from bell this morning.
remember it was £502 for a 12 month full comp policy with them no discounts for buying online but saving i think 12% by paying it in a oner rather than installments.

renewal, £554 for a 10 month accelerator policy with a, wait for it, 10% discount. gave the guy the other policy number id got for the £502 one and told him id changed my date of birth by 1 day to get it. both policies contained the exact same details other than the DOB. So i asked him why there was such a big difference and he said he couldnt work it out ( renewal was going to be around the £600 for a 12month policy ) when he put the same details into my current policy it can back with £502 managed to get it down to £477 but still got it cheaper from their parent group admiral.


This isnt the 1st time ive almost been stung like this so i make a habit of checking it out.

 

[obi_waynne]

You can often haggle with your renewal - its cheaper for them to retain business than keep getting new customers.

Beware the 10 month accelerator - you may not be able to provide Proof of that years no claims bonus. Its a trick to get people to stay with the current insurer.