Insurance Excess

Martin F · June 15, 2017

My insurance is up for renewal and I notice that since going from my IS300h to the RC-F that the excess has increased from £250 to £600 (all other factors the same).

When using one of the comparison sites I notice that the cheapest excess (with a reasonable premium) i can obtain is £450. I'm a little surprised as I recollect excesses only ever being a couple of hundred pounds, but it seems like it is being loaded up for this car.

I can understand why the insurance companies may do this but i'm curious what others have as an excess on their F-Cars.

Malc · June 15, 2017

I've noticed year on year that the compulsory excess has increased on each of my cars .... it's an industry thing I think, not specific car related .... anything to reduce the likely cost of claims on your policies

Malc

Bluesman · June 15, 2017

I have always wondered where you and the Insurance co stand legally. The law says you must have car insurance, however as pointed out by Malcolm the policy excess seem to rise year on year. I have heard of policies with excesses of £2000 and I am sure this is not at the top end of excesses so how much excess can you have before you are deemed not to be insured anymore £100 £200 £1000 £2000?

Verbout · June 15, 2017

The law states you have to have insurance or surety.

If you've got a few bob you can go the surety route.

Malc · June 15, 2017

4 minutes ago, Verbout said:

If you've got a few bob you can go the surety route.

yes, I heard this, and it used to be free asserts of only £50k ( a while ago I know ) BUT one would want to defray the risk, have it underwritten and maybe that wouldn't save too much really. I don't think I would want to personally take on a potential £1mn claim for killing a few people in a freak accident !

Malc

Martin F · June 15, 2017

35 minutes ago, Bluesman said:

so how much excess can you have before you are deemed not to be insured anymore £100 £200 £1000 £2000?

I understand what your saying here, but don't forget the excess is predominantly for repair to your own vehicle, hence why it's normally described as 'Accidental Excess' or similar.

The mandatory requirement is more to cover third party losses, which the insurance company are required to pay out regardless of the excess position.

Rusty Crobar · June 15, 2017

Yes, the excess is only payable if you claim for your car not for 3rd party claims. It prevents insurance companies paying out on small claims.

You can't do anything about the fixed excess but you can changethe voluntary.

Basically you can have the highest excess offered by your company and still be insured but if the excess goes above the value of your car then you'll never be able to make a claim! This usually happens on old bangers, a full comp policy with a massive excess is usually cheaper than tp,f&t.

DAW · June 15, 2017

Not come across involuntary excesses that high TBO. Max involuntary excess I've had for a while now on my cars is £400 inc the ISF. That's with main stream insures and now on an agreed value policy which I took out this year.

DAN@ADRIAN FLUX · June 15, 2017

Hi,

Please feel free to give us a try for insurance if you like.

Regards,

Dan.

Jgtcracer · June 16, 2017

10 hours ago, DAN@ADRIAN FLUX said:

Hi,

Please feel free to give us a try for insurance if you like.

Regards,

Dan.

I'm with Adrian flux and they were the cheapest for me by far, I pay approx £350 a year with around £400 compulsory excess.....I think.

Marcus

V1J4Y (VJ) · June 19, 2017

I went from £50 to £450 changing from my Civic to the IS F, as per Martin's original post - no other changes apart from car ownership. Maybe it is to do with the rarity and high parts value maybe? (I am with Hastings Direct.....)

Linas.P · June 19, 2017

On 6/15/2017 at 11:03 AM, Bluesman said:

how much excess can you have before you are deemed not to be insured anymore £100 £200 £1000 £2000?

As others pointed out, insurance is really only for 3rd party damage, however, the most I have seen beeing offered was £4000 - £1000 voluntary and £3000 compulsory. Insurance is fraud to price out people of owning the car, I personally only have Comprehensive as it is 5 times cheaper than straight 3rd party only, but I am unlikely to ever make claim on it as it would cost more in future premiums than you would ever get for a claim. My current policy states: "standard excess £250 + £900 for ages 17-21, + £600 for 21-25 and +£300 for 25+, which makes the total for me of £550. As well that is clearly age discrimination in plain sign... so the logic behind higher premiums are that younger drivers are more at risk to get into an accident, but at the point of excess isn't that irrelevant?.. Still, you get less money because you are younger... age discrimination? No?!... ok....

Shahpor · June 20, 2017

My policy is also up for renewal, and of course my current insurer thinks that another year of claim free driving means an increase in my premium

Anyway, not a problem since I have found cheaper insurance elsewhere, but while doing so, I came across another strange 'quirk'.

I initially put my No Claims at 10 years, but then thought I had made a mistake and put it down to 9 years; the result? The premium went down by £4. I can understand if the price didn't change at all, but going down for having less No Claims?

This isn't the first time something strange has happened either. My missus had her renewal a few months back and she had a claim in the last 3 years. What happened was that someone hit her car while it was parked overnight. So when it came to inputting the claim on a comparison site, we initially put it as 3rd party at fault. However, since we never identified the guilty party, we decided it would be safer to put it down as a claim from her insurers. What happened this time? £50 cheaper for a fault claim against a non fault one!

Can someone please explain how these companies determine their prices? I wouldn't be surprised if someone suggested a random number generator was involved!

Sorry about the rant, but I didn't want to create a new thread just to bitch and this was the closest one I could find to the topic at hand.

Linas.P · June 20, 2017

Comparison sites are very rewarding if you play around long enough. First and foremost there is no way to explain why Comprehensive insurance is cheaper than Third Party Only ... and not just cheaper, but cheaper by up to 10 times... Things like mileage can make a huge difference and not necessary smaller either - I believe it is 500 miles granularity and every single step gives wildly different results for me 10k can be £800, 10.5k £950 and 11k can be £796...

My guess they have overengineered the logic, by using irrelevant statistics to make stupid prices and in the end of the day rules are so complex that end result is pretty much unpredictable.

I wish it would be like in other countries - car reg + license number = price... and no need to provide the number of blue ties and red socks you have or frankly any other irrelevant information which UK insurance asks.

Rusty Crobar · June 20, 2017

Insurance rating is incredibly complex and based on 100k of thousands of claims over a long period of time. On top of that each underwriter uses their own calculations in get a competitive advantage which results in wildly different prices. It is impossible for people like us to work out as it is not based on logic it's based on statistics. Whether you like it or not the price you pay represents your level of risk based on a combination of around 50 different factors.

Having said that I do know that comp cover is cheaper than basic cover as sensible, safe drivers buy comp and dodgy people who don't care about their car get the legal minimum! Those people cause more accidents which is expensive for insurers. Obviously this is a generalisation but that the nature of mass statistics.

Believe it or not it is a fact that people who make a non fault claim go on to make more claims than people who make a fault claim, if that makes sense. Who knows why but it is a statistical fact! Which is why your price goes up so much after a non fault claim.

I would never defend the insurance industry but it's worth remembering that almost all insurers pay out more in claims than they take in through your premiums. They only make money through sidelines like selling breakdown cover or home insurance etc. The real scam is the fraudsters and personal injury lawyers who drive up claim costs. The government has also tripled insurance tax in the past few years😔

Linas.P · June 20, 2017

@Rusty Crobar - all you said is absolute fact. However, statistics is a funny thing. I can take statistics of (sorry but) lengths of male genitals and derive meaningful correlation between length and number of accidents.... that doesn't mean it is the right way to calculate the price. I can give million more attributes which can be used - skin colour, number of healthy teeth, hair length and colour, whenever boobs are natural or fake etc. All of which can be statistically proven to have a correlation, but has no place in car insurance quotes. Same as it should not matter, whenever you doctor, journalist or nun... whenever you employed or student and so on.

My point - insurers misuses statistics, because event though it is statistically correct it does not make any sense.

It is true that insurers in UK actually makes very little profit (they not losing money), but on average they make ~1%. Surprisingly, in other countries where insurance is much cheaper insurers makes more profit (EU average is ~8%). I believe the reasons for all this nonsense is government fraud or government+insurance conspiracy. By far the major expense are "personal injury" whereas I think it should not be part of car insurance at all. Why? Because we already pay health insurance for the government, so they double charging motorists here. And there are many other caveats in the whole system. Secondly, 1% of profit or even loss can be deliberate... I know hard to understand, but I will not go through corporate tax loopholes here (probably needs separate book) - simply if you don't make a profit, you don't pay tax (e.g. netflix, amazon and many other huge companies never made profit). Insurance not only redistributes premiums, but makes complex investments and in the end of the day, they might declare their car business as loss, but they can make un-taxed profit elsewhere.

In nutshell insurance in UK is ridiculously expensive without any reason and insurance companies at the same time make no profit - paradox.

Shahpor · June 20, 2017

1 hour ago, Rusty Crobar said:

Insurance rating is incredibly complex and based on 100k of thousands of claims over a long period of time. On top of that each underwriter uses their own calculations in get a competitive advantage which results in wildly different prices. It is impossible for people like us to work out as it is not based on logic it's based on statistics. Whether you like it or not the price you pay represents your level of risk based on a combination of around 50 different factors.

I get what you are saying Russell, but how can statistics explain the same insurer charging more for an additional years No Claims when all the other factors are the same? The whole point of having a No Claims Bonus scheme is to reward drivers who don't make claims, so surely some logic should apply?

Malc · June 21, 2017

5 hours ago, Shahpor said:

The whole point of having a No Claims Bonus scheme is to reward drivers who don't make claims,

you see, you're being entirely logical here ............ you just have to imagine the impossible and unimaginable and then you might get somewhere close to the nonsense these insurers and brokers pontificate over .............. to disregard logic and arrive at their nonsensical conclusions

Malc

Rusty Crobar · June 21, 2017

8 hours ago, Shahpor said:

I get what you are saying Russell, but how can statistics explain the same insurer charging more for an additional years No Claims when all the other factors are the same? The whole point of having a No Claims Bonus scheme is to reward drivers who don't make claims, so surely some logic should apply?

The short answer is because they want to try and make some money off you! Longer answer is that you will be getting a bigger no claims discount but this seems to have been outweighed by rises in other areas, possibly taxes and other boring industry stuff but it could also be just for profit.

The industry is broken, to get to the top of price comparison sites insurers have to offer loss leading prices and then add massive price rises at renewal just to stay in business. It is very annoying 😡

Big Rat · June 21, 2017

9 hours ago, Rusty Crobar said:

Insurance rating is incredibly complex and based on 100k of thousands of claims over a long period of time. On top of that each underwriter uses their own calculations in get a competitive advantage which results in wildly different prices. It is impossible for people like us to work out as it is not based on logic it's based on statistics. Whether you like it or not the price you pay represents your level of risk based on a combination of around 50 different factors.

Having said that I do know that comp cover is cheaper than basic cover as sensible, safe drivers buy comp and dodgy people who don't care about their car get the legal minimum! Those people cause more accidents which is expensive for insurers. Obviously this is a generalisation but that the nature of mass statistics.

Believe it or not it is a fact that people who make a non fault claim go on to make more claims than people who make a fault claim, if that makes sense. Who knows why but it is a statistical fact! Which is why your price goes up so much after a non fault claim.

I would never defend the insurance industry but it's worth remembering that almost all insurers pay out more in claims than they take in through your premiums. They only make money through sidelines like selling breakdown cover or home insurance etc. The real scam is the fraudsters and personal injury lawyers who drive up claim costs. The government has also tripled insurance tax in the past few years😔

@Rusty Crobar Good post Russ always like to read the words of an expert in there field.............now mines up for renewal soon I don't suppose you could quote for shall we say £100.00 🤡

🐀

emjay82 · June 21, 2017

23 hours ago, mrfunex said:

You've beaten me to updating my other thread...! I'll do a big post when I get chance - a Lexus is the perfect way to go to Le Mans...

(Two small tasters of the Mulsanne after the race finished and the gendarmes got out of the way. A full speed blast round a deserted Indianapolis and Arnage was a tick off my bucket list as well...)

1 hour ago, Big Rat said:

@Rusty Crobar Good post Russ always like to read the words of an expert in there field.............now mines up for renewal soon I don't suppose you could quote for shall we say £100.00 🤡

🐀

Is this a group buy 🐀? If so, you'll have my £100.00 this afternoon 😉

Martin F · June 21, 2017

On 15/06/2017 at 8:36 PM, DAN@ADRIAN FLUX said:

Hi,

Please feel free to give us a try for insurance if you like.

Regards,

Dan.

No Thanks, I don't really like the way Adrian Flux seem to spam automotive forums and never really contribute.

To update i ended up renewing with my current insurer and reducing voluntary excess to zero so am left with the mandatory at £500. Not great, but not easy to make a significant improvement.

Some good debate in this thread, it's enlightening.

Shahpor · June 21, 2017

7 hours ago, Rusty Crobar said:

The short answer is because they want to try and make some money off you!

Actually, that is a good point and quite logical too.

I suppose one thing I never considered properly is that they want to maximise their profit from you and not just offer you insurance at any cost.

Linas.P · June 21, 2017

5 hours ago, Shahpor said:

Actually, that is a good point and quite logical too.

I suppose one thing I never considered properly is that they want to maximise their profit from you and not just offer you insurance at any cost.

And that is why I don't have sympathy for insurance companies. After all, it is a mandatory thing like a tax, so it should not be privatised and not only cover your from unfortunate, but as well make money out of you... not to mention double covering areas when you already insured ie.e. health. If there would be no government corruption in this case it would be equal to PPI claims scandal where people were double paying for service they already had.