Following the bump to my daughters car last week,which was not her fault,it has been quite an eye opener to see the process of claiming against the third party.I now know why our premiums are so high.
The cost to the third party insurance company will be made up of the settlement for our damaged car,which I am pretty much certain will be written off.The weekly hire cost of a lowly Fiat Panda is going to be £248 per week wxcluding VAT.
Delivery cost £100 + VAT.
The car was today taken away from our home address on the back of a recovery truck to a repairer situated about 40 to 50 miles away,so a round trip of double that.Cost unknown but probably more than £100 + VAT of course.
At the repairer,someone will take time to inspect the car and probably take a couple of hours to come to the same conclusion that took me 5 minutes.No doubt an engineer from the third party insurance will then pay a visit to the garage to assess for himself.Cost unknown but not cheap I suspect.
All this time the repairer will now be charging a storage fee which will probably be at least £50 per day.
Add on the various expenses of the accident management companies involved and it is easy to see how a claim like this just rockets out of all proportion to the cost of the car.
I dread to think what happens when there is injury caused.
I always suspected that the car insurance game was a gravy train and these events would seem to confirm my suspicions.
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i disagree with gravy train.........sorry......... Mr.Tee43
your figures are nearly right but the insurers are grinding the recoverers come storers cum repairers to the stage that it aint worth it anymore and lets sell up to let a builder put houses on our site.
with all the extra"s its now better and easier to pay the initial car claim out and sell the salvage..........seen it, been there, got the badge.
\"a little man in a big world/\"
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Ain't a gravy train given how difficult it's been claiming off Volvo Owner's insurance for personal injury. Ended up taking them to court just to get them to reply to letters. Still ongoing
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OK,substitute "Gravy Train" with any alternative derogatory word of your choice,either way,the insurance industry as a whole do not play with a straight bat.
Of course there may be exceptions.
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Oldman is right, the accident repair business is appalling from a financial point of view - the insurers will direct work to 'approved' bodyshops who will then have a plentiful supply of work but at hourly rates that barely cover the wage bill - let alone expensive equipment and the courtesy cars that the repairer must provide at his expense. There is a view expressed to me by one in the business that they only stay in business by fiddling on parts fitted (i.e. not fitted).
The shop that my informant worked for eventually went bust - they decided to go their own way and charge £5 or so more per hour relying on customers bringing the work to them, but finally failed.
Interestingly many insurers are also not making money on motor, so I don't think there's much hope of a drop in premiums.
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"Interestingly many insurers are also not making money on motor, so I don't think there's much hope of a drop in premiums. "
Strange then isn't it,that there are an awful lot of companies advertising in the yellow pages,and new companies setting up,all clamouring for a part of this loss making business !
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"Interestingly many insurers are also not making money on motor, so I don't think there's much hope of a drop in premiums. " Strange then isn't it,that there are an awful lot of companies advertising in the yellow pages,and new companies setting up,all clamouring for a part of this loss making business !
The fact that there is intense competition should tell you that superprofits are not being made, rather than the opposite. There is very little loyalty with car insurance and that plus the competition keeps premiums at a level that means those who cannot sell or rate risk well enough will make losses.
I am no apologist for the insurance business but profiteering by insurers is not where the money goes - look to selling costs, poor driving skills and fraudulent claims for that.
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"The insurers will direct work to 'approved' bodyshops".
.. but the owner of the vehicle should be able to choose an alternative repairer. I refused my insurer's suggested repairer (30+ miles away in M/cr) in favour of a more local one who had been recommended, for a £1200 repair which was done to my full satisfaction with much less hassle. Now, 2-3 years on, he has gone out of business despite a good reputation. I now use a place which has been trading for 30 years, but he tells me life is increasingly beset with environmental regulations. So this end of the market is no fun either. It all helps to shorten the worthwhile life of our vehicles, which makes no environmental sense either.
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"I don't think there's much hope of a drop in premiums".
Normally I would agree, but most surprisingly mine (Lloyds TSB = Churchill) dropped from £180 to £162 this year for identical cover. Needless to say I renewed before they changed their minds.
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I am with HSBC and despite picking up a fixed penalty for speeding £60 and 3 points my insurance has gone from£289 to £246. it?s a funny old game.
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>>The weekly hire cost of a lowly Fiat Panda is going to be £248 per week wxcluding VAT.>>
That's an excessive amount of money. I've just checked out hiring a Corsa 1.2 for a 25-year-old driver with all cover and unlimited mileage with National.
£130 for a week.
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What\'s for you won\'t pass you by
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Insurance companies work on a business model totally opposite to any other I have ever met.
Most sensible businesses work out that the costs of winning new business (salesmen, cost of winning business, incentives to win customers from competitors ) are so great, it makes business sense to try to keep your existing customers. So giving them good service and prices keeps your selling overheads low.
Insurers apear work on the basis that the costs of winning new business (salesmen,advertising, cost of winning business, incentives to win customers from competitors ) are so great, it makes business sense to try to screw your existing customers and make as much profit out of them as possible whilst they are with you. So giving them bad service and high prices on renewal meand profits go up.
Their competitors meanwhile spend a lot of money (salesmen,advertising, cost of winning business, incentives to win customers from competitors ) to win new customers and then try to screw them.. etc..
Sounds familiar?
It is to me.. :-(
madf
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One reason for extortionate premium payments, as in the case of Toad, is that if you have anything interesting you are mulcted of a vast amenity charge - as with a house on a good site, you pay for the view, not for the masonry.
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Tomo,
could I have a translation please?
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They reckon (correctly) that people will cough up excessive premiums if they want a car enough, so that to a reasonable amount to cover the risk they add such substantial amount as they can get away with, which I have suggested may be termed an amenity charge. (It does not harm their image much, I guess, as ther are those who rejoice that someone else is being clobbered.)
I trust that clarifies.
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Following advice from this backroom, I now alternate annually between Tesco and Direct Line.
I'm now driving a disposable car. If it were cheaper, I'd rather have mimimum Road Traffic Act cover. For some reason the insurance market seems to force me to insure myself against my disposable car catching fire or being stolen. If either of these events occurred I would simply say 'Oh dear' and go and buy another one for a very few hundred quid. There's no way I'd make an insurance claim.
Is there any company who will provide me with such minimum cover (and do so cheaper than 3PF&T cover with Tesco or Direct Line)? I've got a very long NCB and no (current) points.
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My very first year of insurance in 2003 was Third Party Only with Tesco.
Have you explicitly asked them if they (still) do it?
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I've made 4 claims in 42 years, and I reckon they've cost my insurance company more than I've paid them in premiums. So I have to conclude that car insurance premiums are, at worst, reasonable. At best, they're cheap. If injury or death has occurred (fortunately not in any of my incidents) the costs to an insurance company can be astronomical.
--
L\'escargot.
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