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One would like to believe that insurance companies pitch their premiums on the basis of hard statistical evidence, but don't forget that many correlations between claims rates and arbitrary factors may be completely spurious and have no causative implications. And insurers also "cherry pick" by adjusting premiums to attract those who are perceived to have low claims rates: these adjustments may be far more than the claim rates warrant.
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and have no causative implications
Yes, you are correct. Unfortunately in many cases there is no concrete way of determining whether the relationship is causal or not; until there is underwriters will assume it is.
As it is their money they are prepared to offer as risk I can understand this. Would you be prepared to offer your money instead?
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And insurers also "cherry pick" by adjusting premiums to attract those who are perceived to have low claims rates
If you mean they offer lower premiums to lower percieved risk catagories in order to attract these customers .... well of course they do; they would be daft not to.
Or are you suggesting they should offer the same premiums to everyone?
If so, would you accept a premium from such an insurer or would you go with the insurer who offered you the best value for your money?
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I was talking to a colleague a few days back who said his premium had just increased when that of his twin brother's had remained static. They live at the same address & drive identical cars .. the difference? one had recently had a no-fault accident. As I explained to him, individuals who have had accidents are more likely to have a subsequent claim than those who haven't. This might not make common sence but statistically it is true
Statistically it may be true, but that does not automatically justify huge hikes in premiums. In addition I never yet saw insurance cos publishing any of their claims data for independent analysis.
Statistically it may be true that people born on Tuesday have more claims than those born on Monday... doesn't make that a legitimate criteria. It is statistically true that women are lower risk of making claims than men, but once you strip out mileage factor this is much less significant. Lower premiums for women are just an easy (or lazy) way for insurance cos to discriminate.
Generally I don't like regulation, but this area is ripe for it. Motor insurance is a legal requirement, and therefore not like any other financial product.
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Its as close to legally authorised theft that you are going to get
Edited by Avant on 16/10/2011 at 01:39
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Hi Outlier, what do you mean by
doesn't make that a legitimate criteria
Insurance is person A offering to indemnify persons B, C, D, E & etc against a financial loss.
Surely it is person's A decision as to what the criteria is? Or do you think it should be the insured's? ...
.. "I'm 17 years of age & you should insure my Impreza fully comp for £130 per year" How many people do you think would be prepared to undewrite motor loss with that sort of decision making process? ..... Would You?
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I have no idea why being unemployed should hike up the premium what so ever, its not like they think you'll be doing extra miles because how would you afford the petrol? Even if their stats do have some 'proof' that unemployed people crash more the OP's long history of no claims and zero convictions should vastly outweigh that.
Insurance Companies never let any independant body review the data they work on, i think they work on 'pick a number and double it' as some quotes just look simply random. And i mean random, i once ran a quote for the same car living at the same address on two consecutive days and the second day it came out cheaper.
The womens discount is being clamped down on from next year thankfully, they may have less accidents but also make up the minority of drivers doing (on average) lower mileages so its reasonable to assume if everything was 50/50 both men and women (in terms of mileages driven and in amount of each on the road) then the figures would be pretty even and it'd show men and women are just as good/bad as each other. If only a third of drivers are women and those drivers on average do half the mileages the men do it doesnt take Einstein to work out the likelyhood is the man will have the crash. Anybody can be a safe driver if they're not driving.
Im not sure how judging premiums on gender has been allowed to slip through the discrimination law net for so long but i bet insurance companies are sitting on statistics about how black people are more likely to drive without insurance or a licence or have their vehicle involved in crime etc, or stats saying members of certain religions are more of a risk but they're not allowed to use them and they probably wish they could.
As far as the OP is concerned i would just renew it and not change anything, i changed occupation shortly before a car insurance renewal and never bothered telling them and it didnt matter. How are they going to know? Demand a pay slip? Give me a break. So long as you dont crash and dont claim and dont cost them any money, generally insurance companies couldnt care less about you.
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I was unemployed for a short while about five years ago and when I informed the insurers of the fact it made no difference to premiums, so it is a new thing I am guessing.
As for the men v women thing I think it was a marketing ploy!
Yes young wemen do have substancialy cheaper insurance as they do have less accidants, but the older you get the difference reduces an the the accidant rates even out. When, in your forties insurance becomes substancily cheaper for men and if a women want to reduce her insurance premiums she should try putting a man on as a second driver.
Edited by skittles on 16/10/2011 at 13:05
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This happened to me both this year and last - I was unemployed at the time when my insurance renewal notice arrived, and I checked to see what difference it made to my premium, and it was about 30%+!! Fortunately for me (I was doing short-term contracting work at the time), I managed to get a job just in time for the actual renewal, which saved me quite a bit (about £100).
My guess is that as you're unemployed, you're not regularly driving (possibly keeping your driving skills "honed" [make of that what you will]), and when you do, it's likely to be to unfamiliar places at all different times of the day (interviews, "back-to-work" [yeah, right] courses, etc), so you may stand a higher chance of having an accident as a result, especially if you have the worry of an interview (not getting lost, getting there on time, going over what you're going to say, etc) on your mind when you're driving there.
Additionally (again, just me speculating here), the worry/frustration of being unemployed (especially in the long-term) might lead you to being a more agressive driver (e.g. some slow joker is making you late for an interview, so you overtake in a dangerous place [especially if its an unfamiliar area], possibly causing you to have an accident).
I've noticed this with a neighbour of mine - they're much less likely to be an a*****e (making a load of noise with friends over, or driving at high speed locally) at home as they're all tuckered out from a day at work, rather than bumming around at home all day with nothing to do and energy to burn!
Just my 10p's worth on the subject.
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Hmmmm,
Whilst I dislike paying insurance (yawn) & especially with my almost impeccable record.
Insurance is a business, and I would not unreasonably reckon (with no offence intended to the origonal poster) that Socio-enconmic factors would indicate that the habitually unemployed or ineed unemployable are a higher risk group, due to poorer judgement? whatever, and btw who are also more likely to "big" a claim up, if they get or create the oppertunity.
For instance the "crash for cash" racket, I wonder how many of the claimants were in proper full time employment?
Lifes tough.
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Just try putting in retired...
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Quote from Jamie 745 - 'As far as the OP is concerned i would just renew it and not change anything, i changed occupation shortly before a car insurance renewal and never bothered telling them and it didnt matter. How are they going to know? Demand a pay slip? Give me a break. So long as you dont crash and dont claim and dont cost them any money, generally insurance companies couldnt care less about you.'
Good one Jamie745 (not) - What if someone came to this forum looking for advice, noticed that you posted frequently and thought Jamie745 must know what he's talking about, I'll do as he suggests?
Edited by pugswhdi on 17/10/2011 at 12:04
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I dont see what i've said thats so wrong.
I was merely pointing out that they're not going to know any different, just leave the occupation field as it is. Done job. Or as said above, try calling yourself 'Retired'.
Edited by Avant on 17/10/2011 at 23:03
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Jamie recommends you spend money taking out insurance and then invalidate it by lying to them.
And then libels all insurers...with no exceptions..
(He did - I've had to take some of it out for obvious reasons!)
Edited by Avant on 17/10/2011 at 23:04
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Look lets be blunt, in economic times like this how can anyone who becomes unemployed afford to pay MORE for their car insurance? Secondly, why should they have to? Afer 8 years he's now suddenly going to become a drug dealer on a council estate? Hasnt the OP been punished enough by losing his job? Why does the insurance firm feel they have the right to dish out extra punishment to prevent people getting back into work? Its either get paid the premium for an employed person or they dont receive a premium at all. Which would they prefer? They either get paid or they dont. End of.
Edited by Avant on 17/10/2011 at 23:00
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Jamie,
I grew up hearing stories, and indeed knowing instances, about the various insurance scams , the hearth rug, "accidental damage" the "broken" car windscreen, the inflated car repair claims , the spurious injury claims, fronting, lying you name it.
These ALL prepertrated by the general public on the insurance companies, well hey it was "free money" and sure no-body was actually paying.
Well I was......in my increased premiums, and still am, why should us generally honest sorts be expected to pick up the tab for such scoundrels.
Please feel free to set up your own insurance company, I would be curious how long it would last.
I mostly insure with the UFU, or other reputable company, and have no cause for complaining........... except for bankrolling you & your mates who seem to feel free to defraud the insurance company & therefore indirectly the likes of myself.
Edited by dieseldogg on 17/10/2011 at 17:44
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The insurance systems own referal fees has jacked up your premiums more than any ambulance chasers have ever managed to do. The fact most insurance companies are subsideries of banks has led to premium increases since the banking crisis which only an idiot with head-in-sand would think is a co-incidence. The system itself has cost insurance companies more money than anything you or i could ever do, so dont have any sympathy for them. They made their own house of cards and should be forced to suffer as a result.
For the record ive never made an insurance claim, i take the cheapest quote i can get, the lowest expendature to satisfy plods ANPR's and thats that. I have no intention of using any facilities on my insurance as i know it'll only cost me in the long run, as non-fault claims jack up the premium so whats the point in paying for an all singing all dancing policy which i wont use? Insurance is now at the point where its expensive to acquire but financially pointless to use when you do need it.
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Blame Labour for ambulance chasers and higher fees.
www.dailymail.co.uk/news/article-2049903/Labour-cal
Im not interested in blaming anybody anymore, even less interested in what the Daily Mail has to say. Having someone to blame hardly solves the problem. We know Labour made a hash of plenty of things but 16 months into the new Government now surely the time for sitting around blaming the old lot is over? Pinning blame on people isnt going to fix the problem, we've heard the arguments of who's to blame already, what i want to hear is what they're going to do to fix it.
Clarke has already said the referal fees will be banned, but no timescale on it yet, hopefully thats to make sure its watertight when it does come in. But you cant entirely blame the Labour Party as the insurance industry were more than happy to go along with it while it was happening.
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I grew up hearing stories, and indeed knowing instances, about the various insurance scams , the hearth rug, "accidental damage" the "broken" car windscreen, the inflated car repair claims , the spurious injury claims, fronting, lying you name it.
These ALL prepertrated by the general public on the insurance companies, well hey it was "free money" and sure no-body was actually paying.
Well I was......in my increased premiums, and still am, why should us generally honest sorts be expected to pick up the tab for such scoundrels.
Well, I am not allowed to give exact details, but the front nearside wing of my car was scratched at 2mph on a roundabout and the other driver is claiming for whiplash, despite it being his fault (after accident investigators as my insurance company has rejected his claim). So if you don't want to claim and you want the cheapest insurance, don't cry when your insurance company do not pay out a 3rd party claim because you have been economical with the truth. AND, when they send you the bill for the 3rd party costs, which they are entitled to do.
Suggestion to all. HOWEVER painfull it is to tell the truth, do just that. If there is a problem tell them when you take out insurance. Just thank your lucky stars, my brother in law is paying $4800 in canada for a seven seater, (no claims) here in Amman, Jordan at the moment is about £3300 for the camry.. see insurance costs in Europe too!
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Hi Outlier, what do you mean by
doesn't make that a legitimate criteria
Insurance is person A offering to indemnify persons B, C, D, E & etc against a financial loss.
Surely it is person's A decision as to what the criteria is? Or do you think it should be the insured's? ...
.. "I'm 17 years of age & you should insure my Impreza fully comp for £130 per year" How many people do you think would be prepared to undewrite motor loss with that sort of decision making process? ..... Would You?
No, but I didn't suggest any such thing.
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If you're unemployed, please do not be tempted to follow the advice of any of the posters advising you to declare yourself as being retired.
If you are in receipt of JSA you're bt defination seeking a job and thus unemployed.
If you receive JSA and declare yourself as unemployed there is a reasonably strong chance the Insurers could decline your claim and also void your insurance. Apart from the cost of having your claim declined you would also have on your record that you have a voided policy. This can make it difficult eg very expensive (Sometimes impossible) to obtain any type of insurance not just car insurance but it would affect home insurance and possibly business insurance if you were a sole trader
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But the problem is if they're going to charge him extra for not having a job (the most senseless practice ive ever heard of and another barrier from getting work) his only option is get rid of the car entirely as a car he cant drive is useless to him. Then he'll have no car and therefore chances of getting a job are inevitably reduced as a result of that.
Edited by jamie745 on 20/10/2011 at 00:23
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What should happen is that each person's individual claim history should always be paramount in deciding the level of premium; yes, what job you do (or not), where you live, etc should be part of it, but I believe that your past experiences matter just as much as what circumstances you are in today.
When I was unemployed, I was still an engineer, so the main difference would be that instead of using my car to visit clients' offices, building sites, etc, I would be going to interviews and the local job centre. I couldn't afford to go out so much, so I used my car less than before.
To be honest, this should've made very little difference to my premium, as I didn't transform from being (hopefully) a hard-working, upstanding member of society into a slovenly, live solely off benefits chav when I became unemployed. What the insurance companies should do is make allowances for whate you've done UP TO that point, as its likely to be the best guide to your future driving behaviour, not just lumping everyone who is unemployed into one "group".
I think what should happen is that ALL your claims, accidents, runs-ins with the police/bans, etc should be kept permanently on file, not just back 5 years - this may persuade some bad drivers to behave more reasonably. I do think, however, someone who has "turned over a new leaf" should be rewarded, i.e. claims a long time ago should matter much less in determining the premium if no recent ones (or convictions, etc) were also present.
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A few months ago the company I worked for went into liquidation. Being in my late 50s I am struggling to get interviews let alone another job. When my insurances came up for renewal recently I advised the companies of the change of status. The reactions could not have been more different - the company I have a classic car policy with said it would make no difference whilst for my daily driver they initally came back with a hike of over 50%. Eventually they came back with the original premium.
It seems to me that in recent years premiums are often based on what they can get out of you with minor changes causing premiums to be hiked. Changing groups seems to make little difference. It seemed much easier when I first started driving when my local broker looked up the group and went to various charts with group vs age for the premium and then applied the NCB.
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