Car Insurance

#1
Just got Mrs JD a little car to run around in and was ringing around for insurance for it and was going to put myself on it as a named driver when the bloke says to me:

''Have you got any non-motoring related convictions in the last ten years?''

They were going to charge an extra £400 to add me! Now a couple of questions on this.

1. What the fcuk has a non motoring coviction got to do with car insurance? I've got over 20 years no claims on my policy.

2. Why 10 years when legally a conviction is classed as spent and doesn't have to be declared after 5 years?

Needless to say I wasn't happy and they didn't get any business off us.

Is this the norm across the board and how and why can they do it?

Any insurance bods on here enlighten me.
 

The_Duke

LE
Moderator
#2
Jack,

It comes under the heading of "moral hazard".

In short, if you are the type of person to act illegally/irresponsibly in one area of your life, you may be more prone to do so in other areas.

Can't answer the time issue.
 
#3
Car insurance is legalised extortion.
3rd party liablity pought to be incorporated into Road Tax, you pay according to risk group and a maximum vehicle size.
As it stands we are legally forced to buy a product from the insurance companies which is usually over priced and pish poor value but we have no choice.
A friend f mine in New Zealand tells me the whole country manages to function without a legal requirement for insurance, consequently insurance is that cheap most people have anyway as peace of mind
 
#4
jagman said:
Car insurance is legalised extortion.
3rd party liablity pought to be incorporated into Road Tax, you pay according to risk group and a maximum vehicle size.
As it stands we are legally forced to buy a product from the insurance companies which is usually over priced and pish poor value but we have no choice.
A friend f mine in New Zealand tells me the whole country manages to function without a legal requirement for insurance, consequently insurance is that cheap most people have anyway as peace of mind

Thats because in NZ, there is no 3rd party liability. If an accident occures, the state is responsible for investigation and claims. Therefore, no need for "claims are us" solicitors, no need to add on a 20% premium for those who suffer severe whiplash after a 2 mph rear end shunt - everyones happy
 
#5
drain_sniffer said:
jagman said:
Car insurance is legalised extortion.
3rd party liablity pought to be incorporated into Road Tax, you pay according to risk group and a maximum vehicle size.
As it stands we are legally forced to buy a product from the insurance companies which is usually over priced and pish poor value but we have no choice.
A friend f mine in New Zealand tells me the whole country manages to function without a legal requirement for insurance, consequently insurance is that cheap most people have anyway as peace of mind

Thats because in NZ, there is no 3rd party liability. If an accident occures, the state is responsible for investigation and claims. Therefore, no need for "claims are us" solicitors, no need to add on a 20% premium for those who suffer severe whiplash after a 2 mph rear end shunt - everyones happy
What a splendid idea.
New Zealand proves that the idea works too
 

The_Duke

LE
Moderator
#6
jagman said:
Car insurance is legalised extortion.
3rd party liablity pought to be incorporated into Road Tax, you pay according to risk group and a maximum vehicle size.
As it stands we are legally forced to buy a product from the insurance companies which is usually over priced and pish poor value but we have no choice.
A friend f mine in New Zealand tells me the whole country manages to function without a legal requirement for insurance, consequently insurance is that cheap most people have anyway as peace of mind
Actually, it is often the opposite. The domestic motor insurance market works to very narrow profit margins due to the highly competetive environment, internet sale discounts etc. It is over-priced if you don't claim, but then again all insurance appears to be if you don't claim. When you average out the premiums vs the claims it is not over priced at all.

Thank the young Nova drivers causing large third party claims as they smack their rust bucket into your car when they lose control. Thank the drivers of expensive saloon cars who can't drive carefully and put in claims for all of the dents/scrapes they put into the car when parking. Thank the "whiplash experts" and the people who inflate their claim costs to "get their money back".

Often, their profit levels are only brought up to an acceptable point by the "add ons" - personal accident, legal expenses, homecover etc.
 
#7
I disagree about value Duke, it is not for us to subsidise those who do claim or cause claims which is exactly what we do through insurance.
The whole system is flawed but we must legally buy into it.
Her indoor's insurance renewal is due next week, if the isnurance companies are so compeative why is the renewal price through the post (for which they will automatically take payment unless you specifically tell them not to) is 20% more expensive than an online qoute from exactly the same company and exactly the same policy.
We are legally forced to buy a product we may not want at a price that i unjustified. My own insurance company bumped my premium up by 35% because I have a winch and bumper fitted to my Discovery on the grounds I will cause more damage to anyone I run into. Bit of a bummer seeing as I haven't run into anybody at all in 20 odd years of driving.
 

The_Duke

LE
Moderator
#8
jagman said:
I disagree about value Duke, it is not for us to subsidise those who do claim or cause claims which is exactly what we do through insurance.

Exactly - that is how insurance works - every body pays a premium which is less than the cost of any one claim, and those that do not claim contribute towards the payments for those that do. The other option is that no-one is insured, but you have to find the full rebuild cost if your house burns down, or the full replacement cost of your car if you write it off.

The whole system is flawed but we must legally buy into it.

Yes, you must buy into it. If there is no compulsory 3rd party liability then if the chav in his Nova drives into your Mrs and seriously injures her, you will have to pick up all of the costs yourself. the other option is that the state picks up all of the costs, and you pay for this via taxes. And we all know how efficient state organisations are at handling your money, don't we?

Her indoor's insurance renewal is due next week, if the isnurance companies are so compeative why is the renewal price through the post (for which they will automatically take payment unless you specifically tell them not to) is 20% more expensive than an online qoute from exactly the same company and exactly the same policy.

Because they are trying to drive you towards the online product which has lower costs and overheads.

We are legally forced to buy a product we may not want at a price that i unjustified.

Buy 3rd party Road Traffic act only (if you still can).

My own insurance company bumped my premium up by 35% because I have a winch and bumper fitted to my Discovery on the grounds I will cause more damage to anyone I run into. Bit of a bummer seeing as I haven't run into anybody at all in 20 odd years of driving.

No, but other people have and having a winch fitted increases the damage caused in an impact, and so the repair cost goes up. The increased costs are levied across all drivers with winches by way of additional premiums - see answer 1 about how insurance works
 
#9
Oh I know how insurance works.
What I am saying is that the New Zealand model seems to work very effectively.
Its just another element of life in this country where we have no choice but pay for a service/product wether we want it or not.
Unlike other services we are forced to pay for wether we want them or not insurance is payable to companies who make a profit from it (unlike for example council service we pay for)
If New Zealand can perate without a legal obligation for car insurance then why can't we? Or would that simply only be of benefit to the general public and not big business and government?
 

The_Duke

LE
Moderator
#10
Population density, frequency and cost of claims, tendency towards making 3rd party liability claims...there are any number of reasons why their system could be different.

Plenty of people make profit from council services you pay for, and as those non-profit making elements have no financial incentive to manage costs they tend to be quite inefficient.

Or do you believe that local councils and government bodies are paragons of efficiency and cost effectiveness?
 
#11
The_Duke said:
Population density, frequency and cost of claims, tendency towards making 3rd party liability claims...there are any number of reasons why their system could be different.

Plenty of people make profit from council services you pay for, and as those non-profit making elements have no financial incentive to manage costs they tend to be quite inefficient.

Or do you believe that local councils and government bodies are paragons of efficiency and cost effectiveness?
My bold, I did actually laugh when I read that bit, I concede the point. Perhaps this country is long past being able to do anything simple that would benefit ordinary people.
Too many vested interests and too many chancers out there.
The point remains that there is a system out there in New Zealand that works, its a shame that we can only dismiss it and continue to be forced to pay extortionate premiums to insurance companies for a service that many of us simply do not want
 
#12
The_Duke said:
Jack,

It comes under the heading of "moral hazard".

In short, if you are the type of person to act illegally/irresponsibly in one area of your life, you may be more prone to do so in other areas.

Can't answer the time issue.
Cheeky sods!! I've never been called a 'moral hazard' before!!
 
A

ALVIN

Guest
#13
Sounds as if these thieving bast*ards are out to fleese people, and any excuse will do ! I wonder how many people who work for this rip off firm have convictions themselves ? !
 
#14
The postcode lottery is a winner too, I changed the postcode to my fathers address in a somewhat remote area and the price dropped by £500, needless to say I now live there. ;)
 

The_Duke

LE
Moderator
#15
vampireuk said:
The postcode lottery is a winner too, I changed the postcode to my fathers address in a somewhat remote area and the price dropped by £500, needless to say I now live there. ;)
Top tip - think again. It is not a postcode lottery, it is rates set by postcode to reflect the claims history of people living in that area. Strangely enough, you are not the first person to have thought of this and insurers check. What you have done is given a fraudulent answer to a key question. If you have to make a claim, they will investigate.

Did you apply on line? You did? Oh good. There will be an electronic record of your first quote, and then your re-quote for the second address. They will also check that your permanent residence matched the one given for insurance.

At best, your claim will be reduced by the amount you have underpaid your premium by. If the quote was 1000 and you reduced it by 500 (ie halved it), expect to get only half of your claim paid.

At worst they will deny your claim because of fraudulent mis-representation and you will be left with a trashed car and no payout.
 
#16
The_Duke said:
vampireuk said:
The postcode lottery is a winner too, I changed the postcode to my fathers address in a somewhat remote area and the price dropped by £500, needless to say I now live there. ;)
Top tip - think again. It is not a postcode lottery, it is rates set by postcode to reflect the claims history of people living in that area. Strangely enough, you are not the first person to have thought of this and insurers check. What you have done is given a fraudulent answer to a key question. If you have to make a claim, they will investigate.

Did you apply on line? You did? Oh good. There will be an electronic record of your first quote, and then your re-quote for the second address. They will also check that your permanent residence matched the one given for insurance.

At best, your claim will be reduced by the amount you have underpaid your premium by. If the quote was 1000 and you reduced it by 500 (ie halved it), expect to get only half of your claim paid.

At worst they will deny your claim because of fraudulent mis-representation and you will be left with a trashed car and no payout.
What he said. They don't make money by paying out; you give them any excuse not to and they'll take it.
 

The_Duke

LE
Moderator
#17
Bravo_Zulu said:
The_Duke said:
vampireuk said:
The postcode lottery is a winner too, I changed the postcode to my fathers address in a somewhat remote area and the price dropped by £500, needless to say I now live there. ;)
Top tip - think again. It is not a postcode lottery, it is rates set by postcode to reflect the claims history of people living in that area. Strangely enough, you are not the first person to have thought of this and insurers check. What you have done is given a fraudulent answer to a key question. If you have to make a claim, they will investigate.

Did you apply on line? You did? Oh good. There will be an electronic record of your first quote, and then your re-quote for the second address. They will also check that your permanent residence matched the one given for insurance.

At best, your claim will be reduced by the amount you have underpaid your premium by. If the quote was 1000 and you reduced it by 500 (ie halved it), expect to get only half of your claim paid.

At worst they will deny your claim because of fraudulent mis-representation and you will be left with a trashed car and no payout.
What he said. They don't make money by paying out; you give them any excuse not to and they'll take it.
That is not what I said - I will say it again, but clearer.

What he is doing is fraud - it is a crime. If he is found out, his fraudulent act will result in him receiving a significantly reduced payout to match his fraudulently reduced premium, or no payout at all.
 
#18
I never said it was what you said. I agreed with you, then added that if they have an excuse not to pay- such as fraud- then they will take it. Perhaps I should have said "Agreed" instead.
 
#19
The_Duke said:
Bravo_Zulu said:
The_Duke said:
vampireuk said:
The postcode lottery is a winner too, I changed the postcode to my fathers address in a somewhat remote area and the price dropped by £500, needless to say I now live there. ;)
Top tip - think again. It is not a postcode lottery, it is rates set by postcode to reflect the claims history of people living in that area. Strangely enough, you are not the first person to have thought of this and insurers check. What you have done is given a fraudulent answer to a key question. If you have to make a claim, they will investigate.

Did you apply on line? You did? Oh good. There will be an electronic record of your first quote, and then your re-quote for the second address. They will also check that your permanent residence matched the one given for insurance.

At best, your claim will be reduced by the amount you have underpaid your premium by. If the quote was 1000 and you reduced it by 500 (ie halved it), expect to get only half of your claim paid.

At worst they will deny your claim because of fraudulent mis-representation and you will be left with a trashed car and no payout.
What he said. They don't make money by paying out; you give them any excuse not to and they'll take it.
That is not what I said - I will say it again, but clearer.

What he is doing is fraud - it is a crime. If he is found out, his fraudulent act will result in him receiving a significantly reduced payout to match his fraudulently reduced premium, or no payout at all.
The details say where the car is normally kept, so providing the car is registered at the same address then there is largely no way any insurer can query your details in the event of a claim. Licence, V5 and insurance should all have the same address then there is no issue.
 

The_Duke

LE
Moderator
#20
And your licence should show the address where you are normally resident. This is typically the place where you spend the majority of your time, utility bills are sent to etc etc.

If the licence, v5 and insurance are all shown at one address, but you are permanently resident (and the car is kept) at another then there has been a material misrepresentation.

There are plenty of ways an insurer can query your details if the claim is large enough!


Edited to add:

Below is a definition of "material fact"

Material Fact
The principle of “utmost good faith” requires anyone seeking insurance to disclose all the material facts about the risk that he knows, or should know. A material fact has been defined in a number of legal cases and broadly is “any fact which may influence the judgement of a prudent underwriter in deciding whether to accept a risk and if so at what rate of premium.” How do you as an Insured know what an underwriter may regard as ‘material’? If in doubt as to whether some piece of information is relevant, tell insurers anyway. While the law has softened in favour of the Insured in many territories, it is still normally possible for the insurer to turn away any claim if there has been a breach of utmost good faith i.e. material facts have been withheld by the Insured

Note the piece in bold. The poster above said that by changing the address to his fathers, he reduced the price. That in itself indicates that the address the vehicle is kept at is material (and if so, at what rate of premium), and a misrepresentation of material facts is not good for your claims payout health.
 
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