Car insurance weirdness.....

[Don Barzini]

Car insurance is up for renewal next month and my current provider sent me an email inviting me to renew with them. Their wonderful offer was a £10 reduction on last year's premium, bring my total to circa £550 for fully comprehensive cover.

So I went to a price comparison site and got a quote for just under £400. Happy days.

Then it struck me. My car is a bit of an older banger now. Webuyanycar recently advised me they think it's worth around £850. So I thought I could get cheaper insurance by getting just a third party policy rather than fully comp, with the idea that if my car did suffer much damage I'd take the hit, bin it and get another one. So I asked the price comparison site to quote me for third party only, expecting a price back of less than £300.

And the cheapest they could offer me was £650!

Why?!?! Surely a third party policy, by definition, offers less cover and therefore less potential payout?! So why has it come back considerably more expensive than a fully comp policy???

 

[Lord Tyrion]

Maybe third party attracts people who care less about their car and so don't worry about having dings in them? They may not claim, the car is already battered, but the person you dunge will. I can't think of another reason but insurance is a % game so the figures will be like that for a reason.

I agree by the way, it does seem odd at face value.

 

[Bunkermagnet]

It is because they presume you to be less careful about damaging other motors, just as it's always better to get a quote for fully comp before looking at TPFT.

 

[Reemul]

The driver behind the premium is not just the worth of the car. It's how much damage you can do to someone or something with that car and how much it will cost insurers to put right. a £500 quid car can do as much damage to a new car as a £25,000 one or to someone else or a house etc etc

 

[Blue in Munich]

The driver behind the premium is not just the worth of the car. It's how much damage you can do to someone or something with that car and how much it will cost insurers to put right. a £500 quid car can do as much damage to a new car as a £25,000 one or to someone else or a house etc etc

If this is really the case then how come my motorcycle insurance is twice as much as my car insurance; because I'm damn sure I can do much more damage to third party property with a car than I ever will with a motorbike.

About time insurers came clean and admitted it's more about extracting as much as they can from their "clients" than the actual risks involved (in my opinion, of course).

 

[Reemul]

If this is really the case then how come my motorcycle insurance is twice as much as my car insurance; because I'm damn sure I can do much more damage to third party property with a car than I ever will with a motorbike.

About time insurers came clean and admitted it's more about extracting as much as they can from their "clients" than the actual risks involved (in my opinion, of course).

The percentage of claims per policy on a motorbike is much higher than a percentage on cars hence the higher risk which attracts a higher premium.

Another example is household premiums in the higher value are going up considerably at the moment. The valuable section of the premium is now highly rated a lot of this due to people buying an wearing these expensive watches. Very popular but creates added risk hence increased prices.

People still don't understand Risk and how it is applied, they think it's all about value not the whole package.

 

[Blue in Munich]

The percentage of claims per policy on a motorbike is much higher than a percentage on cars hence the higher risk which attracts a higher premium.

Another example is household premiums in the higher value are going up considerably at the moment. The valuable section of the premium is now highly rated a lot of this due to people buying an wearing these expensive watches. Very popular but creates added risk hence increased prices.

People still don't understand Risk and how it is applied, they think it's all about value not the whole package.

Unless something has drastically changed the majority of claims per motorcycle were coming off of the policy of the car driver that hit them , so whilst there might be a higher number of claims the payout will be coming from elsewhere which therefore doesn't justify the increase in premium.