Insurance pricing - confused?
I have recently returned to motorbike ownership after a three year gap. I had thought that insurance pricing was based on actuarial risk and commissions but it appears not.
My previous insurers of 10 years standing refused to recognise any 'no claims' discount as three years had elapsed since my last cover quoted me over £550 premium. But through a price comparison site I got a quote of £169 with the same insurer! I saw that the insurance was actually underwritten by the same company through which I insure two cars, so I contacted them and got a quote for £350. So I insured online for £169 with the same insurance company that had quoted £550 who uses the same underwriter who quoted £350. I checked very carefully and all the cover is identical.
So how do they work out premium pricing? I am totally confused!
My previous insurers of 10 years standing refused to recognise any 'no claims' discount as three years had elapsed since my last cover quoted me over £550 premium. But through a price comparison site I got a quote of £169 with the same insurer! I saw that the insurance was actually underwritten by the same company through which I insure two cars, so I contacted them and got a quote for £350. So I insured online for £169 with the same insurance company that had quoted £550 who uses the same underwriter who quoted £350. I checked very carefully and all the cover is identical.
So how do they work out premium pricing? I am totally confused!
Asked on 12 December 2015 by kierongavan
Answered by
Honest John
A lot of 'insurers' are actually really brokers and, rather than the old system of 10% commission, they can charge what they like on top of the actual underwriter's premium. That's why car insurance in the UK stinks. Private Equity Funding and every other moneygrabber has moved in to a captive audience that is legally compelled to buy their product. They are laughing at us all the way to their yachts, and, because they are all part of the same rich mans club as bankers, they are supported by the same politicians, which is why nothing is done to stop this.
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insurance
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