Car insurance

[Bill DawesParticipant @billdawes]

Sorry should have read ‘exactly same data as lower spec trim’

Bill D.

[Bill Dawes]

On Bill Dawes Said:

 

Another rip off was the road fund licence with a huge bump up because it was over  £40k, exactly same performance, mpg, emmissions etc where is the justification for that other than a rich mans penalty.

 

Bill D

Cars over £40k are generally more likely to have bigger more polluting engines so perhaps it’s to encourage motorists to buy something a bit cleaner?

I was quite surprised to learn that many new cars, particularly German ones it seems, return really poor mpg figures.

[Mike HurleyParticipant @mikehurley60381]

Yes, the mpg on my couple of years old VW is very poor. Mostly urban driving though, but I’m not particularly heavy with the right foot.

The odd motorway trip mpg is very good, as you might expect

 

[Mike Hurley]

On Mike Hurley Said:

Yes, the mpg on my couple of years old VW is very poor. Mostly urban driving though, but I’m not particularly heavy with the right foot.

The odd motorway trip mpg is very good, as you might expect

 

On Mike Hurley Said:

Yes, the mpg on my couple of years old VW is very poor. Mostly urban driving though, but I’m not particularly heavy with the right foot.

The odd motorway trip mpg is very good, as you might expect

 

On Vic Said:

On Bill Dawes Said:

 

Another rip off was the road fund licence with a huge bump up because it was over  £40k, exactly same performance, mpg, emmissions etc where is the justification for that other than a rich mans penalty.

 

Bill D

Cars over £40k are generally more likely to have bigger more polluting engines so perhaps it’s to encourage motorists to buy something a bit cleaner?

I was quite surprised to learn that many new cars, particularly German ones it seems, return really poor mpg figures.

Sorry that’s just not true. It’s very easy to get a new car over £40,000 just by adding extras. Led adaptive headlights can add between £ 2/3000 on base price. Sun roof £2000, better radio £1500 and the list goes on. And if the car is euro 6 it is very clean.

 

[Kiwi BlokeParticipant @kiwibloke62605]

Are any of the UK insurance firms mutual organisations, or do they all exist essentially for the benefit of shareholders?

I don’t wish to defend the insurance companies, however there is one benefit of expensive insurance: when it’s compulsory, it keeps young hooligans (mostly) out of high-performance cars. Here in NZ, insurance is not compulsory. The result is that young boys can own high-performance cars, fit junk discarded tyres from dodgy tyre dealers, and lay rubber all over the roads, to the accompaniment of ‘modified’ (= bloody noisy) exhausts. Sometimes they kill themselves or others. Compulsory insurance would discourage this. But I suppose they can do much the same in anything with a motor…

[VicParticipant @vic]

Well it’s still true Michael, it’s just that you can up the price on some more frugal cars by adding extras. This wasn’t really possible on my last new car purchase (1.6 Petrol £20K) as there weren’t really that many extras available.

I agree that some brands though used to be famous for producing cars that didn’t come with very much standard kit. The old joke about paying extra for a radio in a BMW wasn’t actually a joke.

Edit: I did have to pay for a spare wheel for my car, it only came with a pump and a can of sealant spray. I think I paid about £60.

[Michael Callaghan]

On Michael Callaghan Said:
And if the car is euro 6 it is very clean.

Sadly that’s not true, far from it, particularly with Diesel engines.

[Ex contributorParticipant @mgnbuk]

Sadly that’s not true, far from it, particularly with Diesel engines.

If you look at the Euro 6 specified limits for all vehicles, there is nothing to choose between petrol & diesel engines. There are differences – petrols have an unburnt hydrocarbons limit that diesels don’t & diesels have a NoX limt that petrols don’t. Since investigations carried out into “real world” emissions (rather than “test house” measurements) in the wake of the VW diesel situation that have tweaked the Euro 6 limits (ino change to the actual limits, but substantial tightening of the allowable variance between test house & real world test results), both types now have a particulate limit, as some supposedly compliant petrol engines with direct injection were found to be worse than diesels for particulates.

An article in Auto Express this week announced a new investigation by the FCA into the car insurance market at the behest of parliament, due to questions being asked by MPs about concerns raised by constituents as to whether the “market” is working “correctly”. I am not holding my breath in anticipation that the situation will change in my favour as a result of these “investigations” !

Nigel B.

[Russell EberhardtParticipant @russelleberhardt48058]

My vehicle insurance only increased by 8% this year one reason being that here in France most insurance companies are non profit organisations. They are mutual societies effectively owned by their customers.  Perhaps someone should start that type of organisation in the U.K.

Russell

[Howard LewisParticipant @howardlewis46836]

The thing that irks me is that my insurance is going up by leaps and bounds, despite covering a low annual mileage, in a small Euro 6 compliant petrol, to pay for the dangers of others and the risks of Li batteries bursting into flame.

Once upon a time, insurance was based up the risk that the individual and their vehicle posed.

Now, the safe driver is expected to pay for the unskilled, irresponsible idiot who poses a risk to himself, and for the danger oif being hit by someone who should be priced off the road.

Although, now, they probably drive without insurance, or VED, anyway!

Howard

[Russell Eberhardt]

On Russell Eberhardt Said:

My vehicle insurance only increased by 8% this year one reason being that here in France most insurance companies are non profit organisations. They are mutual societies effectively owned by their customers.  Perhaps someone should start that type of organisation in the U.K.

Russell

As you might reasonably expect from the name:

NFU Mutual

https://www.nfumutual.co.uk/responsible-business/

MichaelG.

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My renewal letter should arrive soon

… I will either be relieved or appalled, but I will let the forum know which.

 

[Robert Atkinson 2Participant @robertatkinson2]

NFU Mutual also insure vintage tractors and stationary engines. That includes gas turbines.

[Ex contributor]

On Ex contributor Said:

Sadly that’s not true, far from it, particularly with Diesel engines.

If you look at the Euro 6 specified limits for all vehicles, there is nothing to choose between petrol & diesel engines. There are differences – petrols have an unburnt hydrocarbons limit that diesels don’t & diesels have a NoX limt that petrols don’t. Since investigations carried out into “real world” emissions (rather than “test house” measurements) in the wake of the VW diesel situation that have tweaked the Euro 6 limits (ino change to the actual limits, but substantial tightening of the allowable variance between test house & real world test results), both types now have a particulate limit, as some supposedly compliant petrol engines with direct injection were found to be worse than diesels for particulates.

An article in Auto Express this week announced a new investigation by the FCA into the car insurance market at the behest of parliament, due to questions being asked by MPs about concerns raised by constituents as to whether the “market” is working “correctly”. I am not holding my breath in anticipation that the situation will change in my favour as a result of these “investigations” !

Nigel B.

[Robert Atkinson 2Participant @robertatkinson2]

The fact that lots of car dont meet the specified limits is a completely different issue. As Nigel B said there is very little to choose between petrol and diesel based on the legislated limits.

If you are going to play statistics on particular emissions then EV’s have more emissions than petrol or diesel cars. That’s for rubber dust emissions from tyres…..
(The regenerative braking in EV’s causes additional tyre wear).

Robert.

[MacolmParticipant @macolm]

“If you are going to play statistics on particular emissions….”

Not to mention “fuel” source for electric cars. According to National Grid: Live, for the last 12 months, wind , solar, and hydro generation together totalled 36.9% of the total, only slightly more than 33.9% for gas plus coal! So much for being “emission free”.

[duncan webster 1Participant @duncanwebster1]

It used to be the case that you didn’t need insurance on a vehicle if you lodged a bond for a large sum of money so that any claims could be paid from that. Might have changed of course.

[Robert Atkinson 2Participant @robertatkinson2]

You would need a pretty big bond to cover causing the car park fire at Luton airport…….
Even causing an accident resulting in loss of an HGV and its load could run into millions.

[NealebParticipant @nealeb]

Renewed my motorbike insurance earlier this week. Premium up by only 6% or so – not bad by numbers given here.

Then I had to declare an accident. Last year, my wife had a minor bump when she hit a post in a car park. No third party involved. She is not listed on my bike policy and does not even have a licence for it. But that claim increased my bike premium by about 10% because I was the holder of a policy on which there was a claim. Protected NCB notwithstanding, the base premium was increased. That does sound like a bit of a scam with no increased risk justification.

By the way, can anyone tell me which “real world” is used for consumption and emission measurements these days? I doubt if I get within 10% of the same MPG doing the same run on successive days. Just too many uncontrolled variables. Did no-one ever read the bit that said that MPG, etc, figures were obtained under controlled conditions for comparison purposes only?

[duncan webster 1]

On duncan webster 1 Said:

It used to be the case that you didn’t need insurance on a vehicle if you lodged a bond for a large sum of money so that any claims could be paid from that. Might have changed of course.

Investopedia is an American site, Duncan, so some of the terminology differs a little:

https://www.investopedia.com/terms/s/selfinsurance.asp#

… but it explains the principle quite well.

MichaelG.

[Robert Atkinson 2Participant @robertatkinson2]

“self insurance” is not the same as placing a bond. Self insurance is not appropriate for third party risks or mandatory insurance.
Note that most 3rd party motor insurance policy in the UK have unlimited personal injury / death cover and £1000,000 or more for damage. Many are unlimited. That’s a big bond. Even minimal interest on that would pay for a lot of insurance.

[Robert Atkinson 2]

On Robert Atkinson 2 Said:

“self insurance” is not the same as placing a bond. …

No, of course it is not … But if you want to self-insure for large sums, you are likely to be asked for a bond.

MichaelG.

[HopperParticipant @hopper]

Direct Line Insurance Posts FY Profit
By RTTNews Staff Writer   ✉   | Published: 3/21/2024 4:09 AM ET |
 
Direct Line Insurance Group plc (DLG.L) reported that its profit attributable to the owners of the company for the year ended 31 December 2023 was 222.9 million pounds or 15.7 pence per share compared to a loss of 231.9 million pounds or 19.1 pence per share in the prior year.

The company said it can now see significant opportunity to remove at least 100 million pounds of costs by the end of 2025 on a run-rate annualized basis, and targets a new net insurance margin, normalized for weather, of 13% in 2026.

………………………………………………………………………………………….

 

“Remove at least 100 million pounds of costs” will probably include getting rid of anyone they think they might have to make a payout on, including very  young and very old drivers who are over-represented in claims statistics. How? By charging exorbitant premiums.

On 10 year old cars, you might consider ditching comprehensive and get the much cheaper third-party property damage insurance that covers the other vehicle if you are in the wrong. Providing it is available and that you can cover the cost of repairing/replacing your own car if you are in the wrong.

[Robert Atkinson 2Participant @robertatkinson2]

Hopper,
I think you mean third party fire and theft cover. This is typically the lowest cost insurance.
Third party only insurance, the minium required by law in the UK, is typically reserved for the otherwise un-insurable and is very expensive. An example would be if someone had convictions for insurance fraud.

Robert.

[Michael Gilligan]

On Michael Gilligan Said:

On Russell Eberhardt Said:

My vehicle insurance only increased by 8% this year one reason being that here in France most insurance companies are non profit organisations. They are mutual societies effectively owned by their customers.  Perhaps someone should start that type of organisation in the U.K.

Russell

As you might reasonably expect from the name:

NFU Mutual

https://www.nfumutual.co.uk/responsible-business/

MichaelG.

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.

My renewal letter should arrive soon

… I will either be relieved or appalled, but I will let the forum know which.

 

Well, more likely to go up than down because NFU Mutual reported a loss of £1.04 billion in 2022.

A mistake I think to believe the reasons are simple, such as EVs or profit gouging etc.  Plenty of political roots too!   For example, so far, leaving the EU has been a financial loss, somewhere between 3 and 13% of GDP, depending on how the cost is estimated, and one way the bill being paid is through inflation.   The benefit of leaving the EU is more sovereignty, not price cuts.   In the same way, Russia’s “Special Military Operation”, had a dramatic impact on UK fuel costs, causing sharply rising gas and electricity bills, that also drove up inflation.  We all pay for inflation, whatever causes it.

Another insurance problem is the rising cost of climate change.   For example, part of the NFU’s loss was due to large payouts caused by large-scale flooding and storm damage.  Profit and loss are shared across the Mutual’s whole portfolio, with no special protection for car policies. If the cost of payouts rises for any reason, the insurer has to cover it somehow, and the bill is almost inevitably passed on to customers.

Mutuals are a good idea because ‘not for profit’ savings can be passed on to the customer.   But, mutuals don’t operate in a vacuum.  To cover themselves against massive claims, as when a car policy holder causes life-changing injuries to several small children, they insure themselves with other companies.  These premiums can also rise due to foreign disasters with no obvious connection to UK driving. Russell’s 8% increase might be due to his insurer being a French Mutual, but my British non-mutual premium only went up by 5%.    Nothing is proved because our personal experiences are data rather than evidence; my guess is we both drive inexpensive cars in low-risk areas, rather than pricey cars in busy high-crime cities.

If it was easy to make a living by selling car insurance completely isolated from the rest of the industry, someone would have done it already!   I’m not happy with insurance costs either, but the truth is we live in a world with many complicated interactions, and it’s never easy to get the best deal possible.  You have to do the work.

I insure through a Broker.  A problem I find with cost comparison websites is they rarely highlight the differences between apparently similar policies, and these can be important.   Going cheaper might be at the cost of a higher compulsory excess, whilst paying more might get an unnecessary  ‘enhanced courtesy car’.   Necessary to read the small-print on all the offers to be sure which deal really is better, which is horribly tedious, and I doubt many do it.   A Broker does that for me, and I check their suggestion against the web, to make sure they’re not taking me for a ride.

Not the best answer!  Usually, Broker suggestions are slightly more expensive, but the cover and features are a notch better.  Trouble is, over the years, I’ve paid more for insurance than necessary because I haven’t made any claims!   Means I’ve paid the Broker to save me time, and bought policies through him for ‘peace of mind’, rather than ‘value for money’.  My broker strategy isn’t optimum, but it’s a reasonable compromise given my lazy life style.  Insurance is a branch of risk management, which is difficult, never ‘simples’.    Anyone really believe an Insurance Company was their friend because of those cuddly Meercat puppet adverts?   Judging by sales, lots of people did…

Dave

 

[Fowlers FuryParticipant @fowlersfury]

Perversely satisfying to read the posts & feel kinship after hours online trying to minimise an increased renewal premium for car. Many of the above postings make valid comments why we’re paying for higher premiums on vehicle & home insurance.

I freely confess to not assimilating all the minutia of insurance policy terms & conditions but two examples of my failure really rancour:-
1. Paid extra for ‘no claims protection’ on a car policy, naively thinking that my NCD would remain intact e.g. after one claim. But at renewal, after one relatively minor claim, NCD was intact but my premium increased significantly. When challenged I was told “You made a claim so your premium has increased“. Net result – I was to pay more than I would have done by moving back one step with my NCD, so paying for “no claims protection” was apparently pointless.
2. Home & Contents Ins. ~ big water leak from HW cylinder on Xmas Eve, plumber 1/2 mile away agrees to come & finds faulty seal. Various reparations needed later. Submitted insurance claim which was rejected. Why? I hadn’t read the small print buried in the policy document which stated “any damage must be reported by phoning our number when we’ll get help to you as soon as possible…blah…blah”. Further argument revealed that all(?) the Ins Cos now do this – irrespective of how long and therefore, how much more damage will occur, until THEIR nearest, low-cost tradesman will get to you.

 

 

 

 

 

 

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