Last years quotes - I forget which company this was, but may be a guide.
less than 1500 miles 105
less than 4000 miles 152
less than 5000 miles 165
less than 8000 miles 184
Martin
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This is an insurance marketing con in my view.
The insurance industry use data modelling and statistics to work out accident rates and motor premiums. They then insure themselves in case they get the numbers wrong.
However, since only 6% of motoring accidents occur on motorways, and by definition if you are covering a high mileage so you are probably travelling most of your time on a motorway, then you are less likey to make a claim.
By asking customer to pay extra for travelling higher miles is a profit spinner for the insurance company.
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"By asking customer to pay extra for travelling higher miles is a profit spinner for the insurance company."
I suppose the insurance companies would say you get a reduction for lower miles! Cup half empty or half full?
When the 'Big Brother' world arrives with a tracker fitted in your car - either voluntarily or mandatory - it is feasible that the insurance companies will charge you on usage. Although will they know if it is being driven by us low risk drivers(of course we are) or by our high risk kids.
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I was checking my renewal quotes with www.directline.com yesterday, and did some quick tests on the effects of estimated mileage -
Any estimated mileage up to 10,000 - all same price.
Declare 12,000 ... +4.5% over the 10,000 rate
Declare 15,000 ... +9.6% over the 10,000 rate
I think I'll declare 10,000.
Ian
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Although will they know if it is being driven by us low risk drivers(of course we are) or by our high risk kids.
As it will also show speed, you will probably be charged per mph/mile ;-)
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Its a bit strange insurance. Loads of time is spent modelling data, calcualting rates etc. And then along comes an underwriter and as its for an old mate, the ratings table goes out of the window.
Insurance co's have been making underwriting losses for ages and have only been able to survive due to good investment performance. Now investment markets are taking a turn for the worse, they are now actually looking more and more at the premiums they charge.
And reinsurance isn't really because they are worried that they have it wrong - its more for the slightly off the wall event, such as serious flooding, serious windstorms or something like Selby happening again.
As for the mileage, its hard to analyse what specific miles an individual does. Insurance is pretty much based on broad brush assumptions. If we do go down the road of Pay As You Go with Big Brother watching, then it may be different.
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With my insurance company i have a 7000mile policy but on renewal i have to declare my present mileometer reading, that is for my discovery strangely my motor bike has a 3000mile limit but i have never been asked to declare the actual mileage on the clock.
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This is an insurance marketing con in my view. The insurance industry use data modelling and statistics to work out accident rates and motor premiums. They then insure themselves in case they get the numbers wrong. However, since only 6% of motoring accidents occur on motorways, and by definition if you are covering a high mileage so you are probably travelling most of your time on a motorway, then you are less likey to make a claim. By asking customer to pay extra for travelling higher miles is a profit spinner for the insurance company.
The insurers may take the view that using a car more means more opportunities to have an accident.
There may be fewer accidents on motorways but the claims will often be big due to the high speed. Most accidents around town (not involving pedestrians) are at low speed, cause less damage and may even not result in a claim.
The most inequitable part of car insurance premiums is the no claims discount. Those with max NCD pay too much and those with none don't pay enough. If the system was made fairer, those with no NCD would be priced out of insurance!
James
(Student Actuary currently studying a General Insurance course - great fun)
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James (H),
do you think that that, like those with max NCD, owners of high-value / high-performance cars pay too much relative to risk. I tend to think that they do. In my experience, owners of those sort of vehicles tend in the main to be older and more careful, and that it's the company car drivers in their mondeos, vectras and so on that represent the higher risk - what have you learnt about this in your General Insurance Course?
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My course isn't quite that specific!
High value/performance cars may have a higher theft risk or cost more to fix when crashed. But it is difficult for insurers to tell whether the driver is careful or trying to exploit all the performance from the car so all get the high 'average' premium.
There is also plenty of competition for bread-and-butter cars but less as you go up the price/performance scale, keeping premiums up.
A company will pay a fair amount for it's company car drivers. However, if the drivers don't pay themselves, they don't have the incentive to drive more carefully.
James
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I've just renewed my insurance. As my estimated mileage, I told them 10,000 - same as last year. I checked after renewing, and discovered that in the last 12 months the car actually did 10,175.
I can't see them complaining about that - but how high would my mileage have to be before the insurance company took the view that I had mislead them?
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I as long as you haven't really taken the mick with the mileage there shouldn't be a problem, if you did 19,000 miles or something but only declared 10,000 then they might have something to say, thats assuming they would even ask you for the mileage? but lets say you did 13,000 instead of 10,000 I personally dont think they'd kick off to much.
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On my last car I said I did high mileage (20,000+) and they asked for the mileometer reading - the certificate arrived saying I did 8,000pa! I queried this and was told it was fine. Queried again on renewal and told it was fine again. On both occasions I kept a note of the call and who I spoke to (just in case!). When the car was written off they had no interest in what I had done
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It states on my policy schedule next to the estimated miles (12k) that if you're going to exceed it, to inform them. They will then add a cost to my premium. If I get to the penultimate day of my policy and have done say only 8k miles, if I called them to tell them, do you think I'd get some premium refunded? I think not.
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a couple of years ago, I phoned my insurer to say that the car would be doing 10k miles pa, not the 5k I had originally said.
I also said my 17yo daughter would now be the main driver, instead of just a named driver.
They gave me a partial refund (!)
They were amongst the cheapest when I took the policy out, so I don't think they overcharged me.
They don't necessarily charge more when you inform them of a change, but some of their methods of calculating premiums defy logic.
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I spoke to my insurer a few years ago at renewal time. I told them that my annual mileage was going to increase from the 12,000 that I originally told them to about 18,000 because I was going to start using my car to commute to and from work.
They told me that once I had been insured with them for 12 months, which I had been, they weren't interested in how many miles I did.
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