UK's car insurance premiums on the rise again.

[ChrisKnottIns]

Insurance is all about assessing the risk. How is it discrimination if a particular demographic consistently performs poorly? Answer me this - if it was your own personal money that had to pay for all claims how would you decide what to charge for a premium?

Wouldn't you start applying risk criteria quite quickly?

[Dancake]

I would have considerably more moral fibre than insurance companies, and therefore would never find myself in a position where I would be ripping people off. You cannot argue that insurance companies don't rip people off, otherwise they wouldn't be bragging about their immense profits. I don't see insurance companies offering rebates because of drops in risk. The risk criteria is undoubtedly discriminatory. How can you tell me that particular demographics perform poorly, and are therefore subject to increased premiums without admitting discrimination? Are insurance companies not aware of who the offenders are? Surely you're all in cohorts with each other to protect your 'investments'? Therefore you should be able to discriminate against those who actually cause the issues, rather than the innocent majority.

What about hiking peoples premiums due to non-fault accidents? How do you explain that one? People would be absolutely stupid to inform their insurance company about a non-fault accident, because it will inevitably lead to a black mark against them when it comes to renewal.

[ChrisKnottIns]

Originally Posted by Dancake

I don't see insurance companies offering rebates because of drops in risk.

It happens when you notify changes such as change of address or change of vehicle and the risk has improved. I see it all the time.

Originally Posted by Dancake

Are insurance companies not aware of who the offenders are? Surely you're all in cohorts with each other to protect your 'investments'? Therefore you should be able to discriminate against those who actually cause the issues, rather than the innocent majority.

Until they 'offend' there's no way of knowing who they are. By the time one finds out the damage has already been done. There's no better model for assessing the risk that a particular driver is likely to present than comparing them to others like them as closely as possible.

Why don't you propose a foolproof model and we can examine it together?

[Dancake]

My proposal would be a government run insurance scheme, with price brackets for different vehicles based on performance and actual repair costs. Bring an element of equality back into the equation.

[ChrisKnottIns]

Originally Posted by Dancake

Brokers, i.e. the middle men, adding additional cost to peoples premiums that doesn't need to be there.

Just spotted this comment too - that's also incorrect I'm afraid. It's a different route to market for insurers so they pay us commission OUT OF the premium rather than having to pay advertising for example - there's no extra cost. Indeed some insurers only deal via brokers.

[ChrisKnottIns]

Originally Posted by Dancake

My proposal would be a government run insurance scheme, with price brackets for different vehicles based on performance and actual repair costs. Bring an element of equality back into the equation.

So you wouldn't differentiate between young, inexperienced drivers and older, experienced drivers for example?

[Dancake]

Originally Posted by ChrisKnottIns

Just spotted this comment too - that's also incorrect I'm afraid. It's a different route to market for insurers so they pay us commission OUT OF the premium rather than having to pay advertising for example - there's no extra cost. Indeed some insurers only deal via brokers.

Do you think the commission payments aren't recouped (and then some) by increasing the price of individual policies?

[Dancake]

Originally Posted by ChrisKnottIns

So you wouldn't differentiate between young, inexperienced drivers and older, experienced drivers for example?

No, because you don't have any proof of individual skill levels, particularly when it comes to hazard perception and reaction times.

[ChrisKnottIns]

Originally Posted by Dancake

No, because you don't have any proof of individual skill levels, particularly when it comes to hazard perception and reaction times.

OK, so presumably young drivers would start paying less than now and older drivers more - to level it out? Straight away you're making older drivers pay for the mistakes of the younger ones.

One in five newly qualified young drivers will have an accident within six months of passing their test, figures show.

In 2015, while 17 to 19-year-old drivers made up only 1.5% of licence holders, they were involved in 12% of deaths or serious injury accidents. That's just a 2 year age bracket. In serious injury cases the compensation payouts are higher because they have a higher number of years of life expectancy ahead - care costs or loss of earnings are calculated for a longer period.

I don't think you've yet proved you have a better model.

I've only commented on the young driver risk. We can move onto mileage and use next if you like. Though it'll be Monday now.

[Dancake]

You work in the industry, so you're naturally biased. What about the 4 out of 5 young drivers that don't have accidents? You're happy for them to foot the bill even though they've done nothing wrong? As for older drivers paying for the mistakes of younger drivers, from what I can see it's a case of all drivers regardless of age are paying to line the pockets of shareholders and stakeholders. Insurance companies crying about increases in taxes is a joke.

Last year as an example, Admiral made pre-tax profits of £193 million in the first 6 months of trading. With an average of 4 million customers, that's an extra *£48.25 per customer. So last year my policy cost nearly an extra £50 because Admiral wanted to boost their profits. Did I get any extra cover for it? Not a chance.

*Total yearly profits would obviously increase this price.