The renewal price for this year's fully comprehensive policy on my 10 year old Fabia saloon came in £50 more than last year, despite all the insurance details and my particulars and proposed use of the vehicle being the same as last year - in fact my mileage over the last year has halved and I start the year with an increase in NCB to 5 years.

A quick look on the internet showed a huge range of premiums, some substantialy

More expensive (£200+) and others up to £150 less.

So, I got back to my existing provider and advised them that I had already done a review of the market and had found a number of providers who could do the same insurance substantially cheaper and one who do it for £80 less with some added extras. In response the best they could do is offer a discount of £20, leaving the alternative provider still £60 cheaper. So I told them that I would not be renewing and, subsequently, when I spoke to the prospective new insurer they confirmed that they were able to offer a further £40 discount by virtue of my union membership. Overall this produced a premium £120 less than the old people were offering.

I'm wondering why there should be such a huge difference in premium given the low value of the car, low proposed mileage and low risk etc.Last year's insurer had been the best of the bunch at that time.Also, 20 years ago, you'd have expected to automaticaly get a reduction in premium with the current insur followinge the annual increment in NCB. Doesn't seem to be the case now. Why ?

Nick

Edited 26 February, 201313 yr by Clunkclick

It makes no sense, has no logic and is completely broken. I get quotes from a few hundred to a few thousand. Infact, if you put your details through a comparison site (dont use your real name as it will add credit checks to your credit history) every week, you will get wildly different values each time.

The whole industry needs a shakeup and dare I say it some standardisation.

Its not the first time that I've experienced this effect.

I had a comprehensive policy two years back with a company that only does on-line policies and their premium, to which 3 years NCB applied at that time, was £20 cheaper than the policy I have just replaced - and I specified a higher mileage. But, after one year, when it came to renewal the premium they wanted doubled ???

With that sort of price volatility, what consumer can afford to be loyal with any one provider. And if the client is compelled to switch insurer every year, then it would seem to indicate that the insurer assessment of premium rates focuses less data derived from that particular client consumer relation and more on other factors i.e. Industry and government databases.

That being the case, then it makes the premium price variation even more inexplicable, unless other factors have more weight in deciding the premium such as attempts to enlarge a particular companies client base, the level of claims suffered by an insurer in any preceding year, the state of the insurers cash flow and the returns they are able to obtain on investment, the promises the CEO has made to investors and the City and differences in consumer credit agencies assessments of clients' customers.

Personally, I think that, once an insurer's customer is broadly categorised as to claim liability and credit worthiness (By what is today, a more-or-less industry wide categorisation system) then, given the UK economic history over the last 20 years, the "City facing" factors will count for more in the determination of premiums, particularly company profit and investment performance.

All these factors, are invisible to and outwith the influence of the individual consumer.

Its a pain, but it means that every year the consumer has to seek fresh quotes in order to get treated half reasonably and can't rely at all on simple schemes for the reduction of premiums built into insurance contracts to progressively rexuce premiums in-line with the insured's clear driving record over the previous year.

So the current system seems to give minimal weighting to a good driving record.

For all-intents-and-purposes, the insurer's assesment of driver potential for liabity and the inequity it embodies is no different in the current system than if they simple imposed a standard insurance charge on all road users and raised it as an additional charge on a gallon of gas.

Nick

Edited 26 February, 201313 yr by Clunkclick

I dont understand why anyone is surprised when their premium goes up.

The press have been saying for long enough it was going up.

Even more so since they changed the rules on women drivers.

I change cars a lot but in 25 years of driving I dont think I have ever had it go down from one year to the next.

The only time mine went down was when I rode motorbikes.

Edited 26 February, 201313 yr by ruffday

Why are you even posting this?

Do you just come on here to moan?

Everyone knows insurance companies try it on come renewal time - they always have and always will as they rely on people just renewing and shopping around.

Nothing new and nothing will change.

My expdrience has been different.

In the past, and I've been driving a car since 1978, it was far easier to see the relationship betwen your activity as a driver/keeper of a vehicle and variations in your premium. Irrespective of your insurer's current liabilities as regards all of its car policy policyholders, you could be assured, if you kept your nose clean in resoect of driving claims and endorsements, that your policy premium would reduce in line with the rise in your NCB and consequently, you were incentivised to keep with the same company. Because people weren't taking out a new policy every year, this kept a lid on insurers admin costs and policy prices.. In those days, it was only the boy raceros with a dodgy driving record who had to do the annual tour of the bucket shop insurers to get a good deal. Nowadays, because insurers jack-up year two premiums to penal levels, irrespective of previous driving record most people are forced to do the modern equivalent of the "Bucket-Shop" tour with main stream insurers, who are now conveniently set-up to do business in the fashion of bucket-shops of old.

The consequential effect of this method of operation is that good-drivers are increasingly treated the same as bad drivers as far as premiums levels are concerned and the insurers cane everybodies clains irrespective of previous driving record.s

In addition, it appears that policy premiums are set to ensure that the insurer never make a loss on the business, irrespective of the standard of judgement they have exercised in assesing their clients as risky propositions - I don't think was the case in the past - some car insurers used to make losses in years gone by!

So what we've got at the moment with UK car insurance is the sharing of losses between policyholders to an extent which disadvantages good drivers to the benefit of the insurers, unnecessary, passed-on admin costs (Due to having to change policies each year),all claims treated with a uniform regard to cost containment irrespective of culpability of the insured and additional supplementson the main policy price to alwmake sure that the insure never goes in the red.

In other words socialised car insurance, administered by profit maximising companies, in a way that costs the policyholders the most.

Personally, I'd rather go back to the old syste.But if the insurers are determined to implement socialised car insurance for the Government lets have it properly mandated and implemented i.e as an ad valorem charge on petrol

Nick

Edited 26 February, 201313 yr by Clunkclick

Of course the market's working*

*If you're the regulator.

If you're anyone else it's screwed and obviously.

Weirdly, I was all set to cancel my renewal this year as it went up last year and I thought "thanks for treating loyal customers". At the time though I couldn't find anything cheaper even with the increase so I had to suck it up and stay with them.

This year though (maybe its because I've hit the grand old age of 33?) my renewal is nearly £100 less than last year and I'm getting quotes of £100 less than that by running quotes through comparethemarket.com! Unfortunately I go and spoilt it by mentioning I want to add coilovers this year

Even though, with coilovers and a few other bits its still £450, nearly £100 cheaper than last year!

I change cars a lot but in 25 years of driving I dont think I have ever had it go down from one year to the next.

My first years insurance on a 1 litre 1986 Fiat Panda was 500 quid and has got progressively better value since then. That was the most I ever had to find.

I've only ever paid more than the previous year when I bought a brand new car to replace an older one, and even then it's been no more than 10% increase that soon drops back.

On the same vehicle it's only got cheaper. I think after cash back from quidco it was around £200.

It takes a little shopping round but no more than an hour.

Edited 26 February, 201313 yr by Dr Zoidberg

The discrepancies in the insurance industry are disgusting, any other industry would dragged over hot coals but they seem to get away with licensed thievery

strange thing I found recently is with all my years of ncd some inusurers wouldn't quote at all on comparison sites, and others gave daft figures, but when I tried again and told them I had no ncd at all I got a quote for £400 whereas the cheapest before was £800, work that oe out if you can? It astounded me.

As much as I like Paul Whitehouse, and believe he is a very talented actor, Aviva are ***** and **** takers IMO

Gave me a quote into the four figures, yet Churchill came in at the low hundreds and after a haggle, Green Flag cover on top.

Year 1, Swiftcover, fully comp, 3 years NCB, premium. £345

Year 2 renewal with Swiftcover, they wanted £500 for 4 Years NCB.

So switched ro Be Wiser, fully comp, 4 years NCB, £356(Aviva !).

Year 3, Be Wiser wanted £409 for 5 years NCB,

So switched to LV for £286 !!!

Duh ????

Usuage was SDP + commutting up for year 1 only with 5,000 miles per annum, thereafter SDP only and 4,000 miles.

SP30 and claim dating from 2006 applied up to year 2 under the 5 year rule.

Nick

Edited 26 February, 201313 yr by Clunkclick

Why this constant whinge and moan about whether or not the Insurance market is working, when virtually every word of every anecdote above proves that it is?

The very existence of these highly variable quotes shows that there is no collusion or cartel operating within the industry.

Each company has its own underwriting procedures, targetted market shares, fixed costs and overheads, and anticipated profit margins and is free to apply them as it feels fit.

Contrary to popular belief there are no standard lists of loadings / discounts for Driver ages, Postcodes, Car Groups, Endoresement points & classes etc. across the industry. Whilst there are similarities they remain individual to particular companies and groups.

Until the 1960's there was indeed a Motor Insurance cartel but it was outlawed by the then Government (which actually led to a massive influx of new, criminal companies and fraudulent policies - google Emil Savundra for more info) So, each provider is permitted to set its own terms, and does so.

Surely this is to YOUR advantage - a little bit of online shopping around and by your own admission(s) you have managed to save hundreds of £s.

Try that with your weekly shopping, buying petrol, paying your council tax or any of the other routine costs of living

So, what is your problem???

(P.S. - you're quite right about firms running Motor Insurance at an Underwriting loss, in fact I worked for the first company to adopt this accounting approach. It worked as long as the premiums received and invested produced a high enough return of investment income to make up the shortfall. In todays financial scenario these returns are now too small to allow this, so U/W profit is back.)

Notng your location, I take it that you may have some professional association with the Insurance industry ?

The savings, when they are available, are undoubtedly welcome.

Trouble is, under the current regime you can"t predict with any certainty, assuming that your personal circumstances don't change, whether next years premium will be within a given percentage limit of this year's premium. I.e. They are totally unpredictable, unlike other retail domestic insurance markets such as household fabric or contents insurance.How is the individual supposed to budget when a premium can vary up to 20 % a year. Now, 20 years ago, I could predict, within £20 to £40 what next year"s motor policy would cost (Assuming, I kept my nose clean and my circumstances remained constant). In otherwords, I was able to obtain some sense of what was a reasonable price and what was not from year to year. I am unable to get that same sense in the current market as the sytem has abolished long-term prices and a large element of corporate introduced randomness, based on factors external to the strict confines of the insurer/policyholder relationship (Marketing policy, ,requiresments of the City of London) appears to have been introduced. Without a historical sense of what the price progression should be, the availability of "spot" prices, as currently provided, counts for nothing. You can't tell whether you are being ripped-off by cartel of spot pricers.

Despite the availability of these value rendering web-based search engines, most people in jobs haven't got the time to do multiple pass searches until they happen upon a premium and policy terms which suits their purpose. And this process is elongated and made even more tedious, when a lot of the prices proferred are based on predatory marketing "Loss leaders" which can't be sustained.

I say again, the huge variability of quotes, demonstrable evidence of inverse relationships applying (As quoted above on NCB) succeeds in conveying the impression that the current system of car insurance pricing In the UK has its roots and raison d'etre well outside the normal commercial purchaser/provider relationship - its like a marriage, with an u declared third party playing a prominent role in family decision making all the time.

Nick

Edited 27 February, 201313 yr by Clunkclick

No.

Not because "you too can save £several_hundred by switching to $company/through $screen_scraper", but because it is, quite unsanely, prioritising "winning new business" over "customer retention", which actually increases costs.