Insurance renewal after a bump.
At the beginning of October, I was towing our caravan, and pulled into the M5 northbound Sedgemoor Services. The dedicated caravan parking area was crowded and chaotic. Although it was very tight, my rearview external mirror showed a very slight gap between my van and one already parked. But the vans made contact. Trying to later work out what happened, we think that a pothole caused the van (soft rubber suspension) to rock sufficiently to cause the problem.
My car insurance had to pay out for the third party's damage (£402), but were not involved in the damage to my own van (that's with a specialist insurer).
I have a £100 excess on my policy but, strangely, this was not charged because it was a caravan (it would have been charged had their car been damaged).
This week, my insurance renewal arrived. The premium has risen from £328.60 to £436.58 (my NCB is protected).
I was told that this incident would cause an increase in premium, but it would be subject to a reduction in line with my 70% NCB discount.
There have been various reports of steep premium increases this year, so it seems as if the increase due to this incident is relatively low.
It is my second fault claim in 58 years of driving (my first one over 12 years ago; and also on a carpark), but insurers only count back around 5 years for risk assessment.
I am still very annoyed with myself, though!
Have I been lucky, and got off lightly?
Personally, I feel you have been lucky. My insurance went up around 50% this year in March. I checked the premium against comparison websites, and there was only a few pounds difference between my increased premium and the charges from other companies. (No change in circumstances from last year.)
Perhaps you are right, Rolebama, that I escaped lightly. Looking back at my previous two net premiums I have found little change in the rate of increase.
Dec 2009-2010 no change in circumstances - Net premium £251.90
Dec 2010-2011 no change in circumstances - Net premium £328.60 = 30.45% increase.
Dec 2011-2012 only change being this bump -Net premium £436.58 = 32.86% increase.
One frightening aspect of these figures is that those on low/fixed/retirement incomes could be facing being unable to afford to run a motor vehicle in the very near future.
I always thought that if your NCB protected you can a bump without it being affected?
It looks like I was wrong/
I pay around £240 a year for that wee car we have just now, and I thought that was expensive, but then again Ive not had to pay car insurance for the past nine years, as we were using the Mobility Scheme for our car.
Hi, smudger. I think you and I are thinking along the same lines.
Originally Posted by smudger
I rang my insurers and asked them to tell me what the renewal premium would have been, had there not been a claim. The reply was not what you would call 'transparent'.
He (the call pespondent) said that he did not have the relevant facts before him, so could not (would not?) tell me. Since the renewal is automatic, unless I do nothing, then they must have the information to calculate renewal premiums. There was also some reference to "it depending upon the liability costs paid out". I did manage to elicit from him the amount paid out, which was £402., but he said that the file was still open. Well, I got a letter card from the third party, saying that his caravan had been fixed and that he was back home with it. And there certainly will not be any follow-up claims for 'injuries' or such, because his outfit was stationary and mine moving very slowly in a cramped parking situation. The vans only just touched, but caravans are flimsy things and easily damaged.
My gripe is that these 'increased risk' loadings which insurers put onto a premium are little short of corruption.
When you insure a car, you then earn a NCB, which reduces the premium as you drive claim-free in future years. That bonus is reduced or removed in the event of a fault claim. This is how the premium cost is affected.
A protected bonus, for which about 19% is added to the premium, and is therefore paid for, so I believe this is where corruption enters the equation.
The NCB, on my policy anyhow, is based on 9 accident-free years (it does not define fault or no-fault in the policy); probably because 'fault' is decided by whether the insurers pay out any costs. But the risk consideration is based on a record of only the past 5 years.
In my case, this is my second fault claim in 58 years of driving; the first one also being during a car parking manoeuvre, after having new tyres fitted to my motorhome, and supposingly being 'watched back' by a guy in overalls. That was some 12 or more years ago. So, this increased risk element is done a bit unfairly; and obviously, the unfairness is to the advantage of the insurer.
So, a NCB reduces a premium, and a protected NCB also protects the premium, which is then increased due to 'risk'. Which is corruption.
Hi Snowball, this statement suggests you are still using the purchase price as the value of your vehicle, this should have a small effect on the premium. Of course, in the case of a write off they will only pay market value
Originally Posted by Snowball
They will pay retail market value (and my GAP insurance has not yet expired, so it would not be wise to change things until next year).
Originally Posted by wagolynn
But you may find the following info interesting. I am not going to name names, but what I recount is absolutely truthful.
For several days I have received texts and mail specific to my car and myself from a nationally known insurance broker, and the latest text came this morning, just after I had put my previous post on this topic. So I rang the company and asked for a quote. This is what happened.
I went through all the usual data-collecting process, and informed them of my 'bump' of 2/10/2011.
Now, bear in mind that my current insurance is brokered through my bank, and the renewal quote is £436.58.
This new broker mentioned the best deal, and it happened to be with the same insurance company that I am currently insured with.
The quote was £693.00, and that was the best figure. The excess was a compulsory £150 and voluntary nil (my excess is £100 total).
I then told the guy my renewal figure of £436.58.
He said to give him a minute whilst he 'looked at' what he could do for me, and then said he could give me a special reduction of £270, and the new figure was then £423.13.
How could he simply make a cut like that unless we are being offered premiums that are artificially high? This reinforces my opinion that corruption is at work, and I think that the insurance industry is well overdue for investigation into its practices.
Annual premiums of 30% seem to be becoming the norm. If insurers are as strapped for cash as they would have us believe, then off-the-cuff reductions like this would not be possible.
It does make you wonder Snowball, modern vehicles tend to be susceptible to greater damage in impacts, crumple zones, thinner metal with structures that are more complex, complex finishing etc. It is labour intensive work. Couple that with, most body shop jobs will be paid for by insurance, there is little incentive to keep the price under control, which is not the same as an incentive to cut corners. Successive governments have skirted round any regulation firstly, because it is finance, 'we must not touch the city’, and secondly, many of them (civil serpents included) go looking for jobs and funds in the city. Anyway, it is only about motorists and they are always good for a swindle or two...
Well, wagolynn, these days banks and building societies are closely linked; both offering much the same services. And recent government has shown inclinations, under pressure, that they might have to rein-in the banks regarding their finances. As most insurance companies are simply branches of banks, it follows that there could be a risk of banks repairing any financial damage by milking the insurance market.
Government would be wise not to overlook this strategy, because the economic well-being of the country could be badly affected. Allowed to go unchecked, driving without insurance could become even more rife. Added to this, many homes could be under insured; leading to critical hardship in the time of disasters such as extensive flooding.
Even small (and possibly not so small?) businesses might trim insurance costs to the detriment of their workforces. When financial hardship puts peoples' backs to the wall, dangerous corner-cutting risks are not the preserve of any one section of society. Unlike food and other commodities that people regard as vital, insurance is seen generally as a necessary evil; but one which may be seriously stripped back as not being one of the important essentials when money is tight.
There is little wonder it is all such a mess, the combination of politicians and bankers is a toxic mix just look at the Euro. Though, if the money markets decide to attack the UK and the £ we would have the same problems, very little to export and we own nothing...