Car Insurance Renewal

I've stuck with NFU because they have always paid up. And they insure my (thatched) house which isn't easy.

I probably pay far more than I should but at leats when s*it happens, they are there.

I think I also have free AA cover.

Sadly NFU are generally more expensive for all insurance. They still cover my buildings and land but the cars are with LV. Bit of a hike this year and certainly not the cheapest available. However, their repairers made an excellent job of a *no fault* side damage claim and I feel I owe them something:-)

Recovery is an extra £20 or so.

I use a broker (Howden - "Thatcham Schemes" (was A-Plan)) and usually go with their recommendation. The recommend a swap to a cheaper on from time to time, but quite often stay with the same one for several years.

They refused to insure a friend's car because he lives in a high-risk postcode (N8). Surely this should be dealt with either by weighting the premium or imposing special conditions?

The problem can be what's euphemistically called "moral hazard". Weighting the premium can simply encourage even more moral hazard.

Special Condition No 1: the time honoured usenet standby "Move somewhere less pikey"?

Goodness me, is "moral hazard" still around?

I started my insurance career with a tariff insurer 60 years ago pretty well to the day. As part of learning how to underwrite I was told we always added a percentage to the premiums for foreigners for "moral hazard". When I asked why I was told it was because foreigners don't always tell the truth.

For recent decades, I have always used a broker - Adrian Flux, leaving to them to find the cheapest quote to fit my requiements. Originally, had proved to be quite competitive, their quotes would gradually increase over a few years, so occaisionally, I would suggest they try to find something more competitive, and it always worked.

This year, their quote was increased by around 2/3rds, to £380, to more than double the quotes I could find on compare sites. I emailed them, asked them to try a requote, but their requote was still far more expensive, so time to leave AF.

I paid around £186, fully comp, with Aviva. I have never had a claim in

My friend in north London tells the truth but he does talk a lot of rubbish at times. Does this count?

Why does weighting the premium encourage more risk-taking that allowing comprehensive insurance? Surely a higher premium means there is more to lose in the event of a claim through increased premium or loss of no-claims discount?

Unfortunately, yes, or less prone to flooding for buildings insurance.

It is said (in the insurance trade) that some people regard insurance as a sort of high interest savings account, and they expect to recover their premiums (several times over) each year. So, raising the premiums just raises their expectations of how much they need to claim.

Losing their NCDs doesn't necessarily bother them, as they just claim more to compensate.

I'm not saying this is entirely accurate, and it certainly doesn't apply to everybody in a particular area. But, it does explain why some insurers will simply decline to quote. Their statistics show that they have made a loss in that area for some time, and the easiest commercial decision is just not to bother.

And, of course, moral hazard is still a consideration, as human nature hasn't changed.

Some kinds of claims are more common in certain areas.

For example, it's getting very expensive to insure a Range Rover in London nowadays, because there are gangs who have cracked the security systems and are stealing them for export. If you owned the same Range Rover in, say, Shetland, you might be at a much lower risk of it being stolen and the premium could be a lot lower. Even if you regularly used it to commute to London the insurer knows that, statistically speaking, it's likely to spend much less time in London than if you lived there and so the theft risk is much lower.

Maybe some insurers just decide that insuring a RR in London is not worth the hassle, and decline to quote.

Theo

I heard if a car gets stolen in Arran, the cops just go to the ferry terminal at Brodick and wait there.

Same with me last year with Adrian Flux; I'd been with them 10+ years. Via Go Compare I eventually went with the AA - not quite the cheapest, but much less than what AF had quoted me.

Over the years, they have made their systems more and more complex, all online, needing you to remember paswords, just to see what they are quoting, and go through multiple, annoying pages. They used to just send a straighforward quote, in a letter. It's as if they want you you to just agree to renew, without seeing the quote.

I just received an email from Confused.com (not Go Compare as I stated earlier!). The first thing they say is "Don't settle for your auto-renewal price". I think that goes without saying now, as it's obvious that loyalty not only counts for nothing, it works against you. As you say, they just want you to agree to the renewal quote because it's what you've always done, and you're a loyal customer. :-(

The other technique is to give you a renewal quote which is very little different to the previous year - but buried in all that fine print is a significant dilution of the actual cover they give you.

Yep, AF did that as well, I had 'any vehicle, I didn't own' cover, but they knocked that off this year, as well as the massive cost increase.

There is also the items that may have been fully covered in the original policy but now are add on extras at a cost that have to be added to the quote.