Are insurance comapnies having a massive laugh at us all!

[Jozo]

I am fed up with the way people are treated by insurance companies. It is by law that one must be insured to drive a car.

Why the hell then each insurance company gives you very different quote ?

Who is making money here ?

I am writing this because I moved to very pretty area - own driveway, garage etc.. from a place which had not garage, car was parked on the road outside the flat and the bloody insurance tell me that the price is 40£ more for the insurance ? So I pay more if I do not have a garage and then I pay more if I move to a lot safer and secure area with own garage. Does not make sense.

And also I do not understand all the new questions they add every year to gather more information about us "DRIVERS".

Why does it matter if you drive 10 000 miles per year only for business or only for domestic use. One still does the 10 000 miles.

There is lot more I am getting fed up with.

Thanks,

 

[businessfunding]

Insurance companies run highly sophisticated financial models based partly on actuarial stats and partly on balancing their risk portfolio.

TBH I really don't find it difficult insuring my car.

 

[Jozo]

Insurance companies run highly sophisticated financial models based partly on actuarial stats and partly on balancing their risk portfolio.

TBH I really don't find it difficult insuring my car.

Dear kickstartbtm,

I do not find it difficult to insure my car.

COME ON MAN - "run highly sophisticated financial models based partly on actuarial stats and partly on balancing their risk portfolio" - this is complete load of rubbish.

 

[Paul_Rosser]

The thing I found strange was that using two different compare websites I got different quotes from the same company, I also got a higher quote by going directly to the insurance firm in question for exactly the same cover.

 

[businessfunding]

Dear kickstartbtm,

- this is complete load of rubbish.

Based on???

 

[david.waller]

Dear Jozo,

I work in insurance and can assure you, the insurance companies are not laughing at us. What kickstartbtm said is entirely true.

When it comes to motor insurance, the insurance companies have some very sophisticated software to analyse all the information and determine a price that should lead to covering their costs and making some form of profit. One of the key things they have to do once the pricing model is complete is to ensure they have a "balanced" book of business. As soon as they fill a quota on a particular segment of risk, the price will rise on any risks that fall in that segment as you don't want an unbalanced book of business.

Why wouldn't you want an unbalanced book of business you may ask? Well its all about spreading risk and managing it. You could have a book of business with motor risks that are all considered excellent (affluent neighbourhood, low crime etc) BUT what if all that risk is concentrated in one area? They could have a windstorm come in, damage all the motors on their entire book of business and the payout would be huge, yet the premiums would never cover the cost. So the key for them is to ensure the biggest spread of risk possible, which in turn minimises peaks and troughs in their loss figures. So in essence, your premium can indeed go up even though the risk is better. The reason for it can simply be, that your change in address does not suit their modelling at that point in time and therefore a premium is charged for it. It is unfortunate, but that is the way it works. In the long run, the way they price their risks works in our favour.

As a further point to note, these insurance companies that do motor insurance really aren't making vast profits. They are all treading very close to the break even line and are all desperately hoping that a competitor or two pulls out of the market so there is less competition, because currently the competition is causing prices to be very competitive.

There was a remark about the same company having different prices depending on the comparison website used. This can be attributable to a comparison website negotiating a deal with the insurer that is different to another website. One may be getting less commission that the other for instance. Or another reason can be that the questions asked are not identical on those websites and therefore certain assumptions are made and can therefore return different results. By approaching direct you may indeed get a different price again as there is no comparison site involved at all.

Hope the above helps to answer some of your questions / concerns.