Dysfunctional insurance market strikes again (older used cars in the firing line)

Bio Mech · 23-07-2015 2:07pm

Pov06 wrote: »

Please it's easy for an insurance assessor to check if the tyres are bald.

It doesn't matter as they will have to pay out third party costs anyway. They are legally obliged to. Comp on an old car costs little but costs for injuring a third party are where the big numbers are.

Pov06 · 23-07-2015 2:10pm

To Elland Back wrote: »

Insurers cannot refuse to pay a 3rd party if the vehicle is not roadworthy and trying to recover their outlay from the policyholder would be futile.

As the article points out, older cars are often used for staged accidents. People buying bangers and arranging to be hit etc

Also, there are countless comments on this forum from people who insure old 1 litre cars in order to avail of the driving of other cars extension to drive a 'friends' powerful car.

The own damage aspect of a claim never really concerns an insurer, it's the damage a car/driver can cause is the problem. Don't forget, passengers in a car can sue the driver for injuries if he is at fault and an older vehicle is rarely as safe as a newer one.

Bio Mech wrote: »

It doesn't matter as they will have to pay out third party costs anyway. They are legally obliged to. Comp on an old car costs little but costs for injuring a third party are where the big numbers are.

Indeed the insurance company has to pay the third party. However they can recoup the payout from the insured because they did not adhere to the terms of the policy which is having a roadworthy car (if they implemented it).

Bio Mech · 23-07-2015 2:18pm

Pov06 wrote: »

Indeed the insurance company has to pay the third party. However they can recoup the payout from the insured because they did not adhere to the terms of the policy which is having a roadworthy car (if they implemented it).

They could try but in practice its costly because it has to go via the courts and its a messy process. Not cost effective for them to do it unless the costs to recoup are huge and at that point it becomes less likely that the pursued party could pay them back anyway.

Its a nice idea but it is difficult to actually enact. Thus its easier and more cost effective to minimise their risks by raising premiums or pricing the risk out of their portfolio. Unfortunately, as companies there for profit, that's how they see it.

wotzgoingon · 23-07-2015 2:24pm

I have a 1998 car and it passed the NCT without me having to do anything for it. Well I got 4 tyres.

They give out cheap tax rates to newer cars now the insurance companies won't insure older cars. It's a money monopoly. I would not be surprised if it was the government who brought in this legislation. Ireland does not have a car manufacturer so I do not know where they are making out it is good for everybody if everyone drives new cars. The only countries making money off this is countries who manufacturer cars.

Just to add my car is fine and I cannot afford a new car so if they want to provide free 5-7 year old cars to people like off they go.

galwaytt · 23-07-2015 2:33pm

thebiglad wrote: »

This is not to do with the car itself and whether or not they have to pay out due to no NCT.

These cars will be invariably insured Third Party Only or Third Party Fire and Theft so regardless of whether or not the car has an NCT the insurer will be paying out on the damages the car causes - whether they can avoid paying for the insured car is irrelevant as there is no cover on that vehicle anyhow.

The article and reason supplied is that older cars simply have more collisions - the insurers data must show that and no amount of individuals with good driving records and a 15+ year old car will change the mass data set with they have built up.

Sorry, unless I get personal visibility on those records, and the veracity of them, I call BS - I simply do not believe that the age of cars is a factor.

What is more likely is now that older cars represent the majority of the national fleet, then as surely as night follows day, the majority as a % of those involved in accidents are in older cars.

Issue us all with spanking new 152-reg cars and all that will happen is that the majority of accidents will be in new cars.

Cars don't crash - people do. That's why we have and maintain a drivers licence and a driving history -otherwise, what's the point ?

galwaytt · 23-07-2015 2:37pm

zurbfoundation wrote: »

Bald tyres don't pass NCT - if the car is NCT'ed its passed the same safety checks as a 2011 car - therefore I cant see why they load a premium onto anything that is over 15 years old and has passed the same checks

..wasn't that the big sales job they did on us having the NCT in the first place ??

dasa29 · 23-07-2015 2:52pm

dodzy wrote: »

FWIW, I was told during one of the above calls that FBD intend to leave the motor market, and are just quoting ridiculous renewal premiums because they at least have to quote.

Might be useful to others on their hunt !

Hi guys there might be something to this I went to the FBD centre close to me and the person I was talking to was unable to give me a new quote.

Currently with FBD.
2001 Yaris 1l.
Full NCB
Full clean DL
Zero p.points.
Last year I paid €457.93, fully comp.

Renewal docs arrived yesterday. €615.03 or €584.28 if renewed online with 5% off

have been looking around and the best is around €500, but did notice something with 25plus.ie and that is
1 Quote saying I work was €350.03
2 Quote saying I don't work was €497.51
now I am not saying to do this I just wanted people to know the difference between them.

ironclaw · 23-07-2015 2:53pm

obezyana wrote: »

What a load of cock. Are you seriously suggesting just because a car is older the person driving might be inexperienced?

Mehapoy wrote: »

Sorry, but That logic doesn't make sense at all! So younger drivers tend to drive older cars, younger drivers tend to have more accidents, conclusion, charge through the nose to insure older cars!

You're missing the math behind insurance. If you have 100 older cars on the books, and 75 of them are driven by 'high risk' drivers (Young, Inexperienced), you need to load the other 25 irregardless of age / experience because the majority of your risk is caused by the other 75. Your risk profile for that age of car is high, hence you need to make up the cover for that group.

On the flip side, if you have 100 newer cars driven by 'low risk' groups (Likely someone of good driving experience being a shade older and a suitable income to support the newer car), the insurance in that bracket will be lower.

Insurance is not about the individual. Its about the risk bracket you fall into. And if you happen to have a older car that sits in with a 'high risk' group, you're going to pay through the nose or not be quoted at all. The older Bora and Audi TDI's are classic examples of this. I'm not for one second implying that someone in a 1995 is a worst driver than a 2015, I'm saying the mathematical probability is higher that the 1995 is a higher risk. Its pure math. And at the end of the day, that's all that matters to the insurance company

(I say all this as someone under 30 who has had cars as old as 1999 up until recently)

To Elland Back · 23-07-2015 2:55pm

Pov06 wrote: »

Indeed the insurance company has to pay the third party. However they can recoup the payout from the insured because they did not adhere to the terms of the policy which is having a roadworthy car (if they implemented it).

In fairness, there is little chance of recovering anything from a person who owns a car of that age

(Not being arrogant, mine is a 1999)

To Elland Back · 23-07-2015 2:58pm

wotzgoingon wrote: »

I would not be surprised if it was the government who brought in this legislation.

It's not legislation, it is 2 private businesses deciding what they want (or don't want) to sell to the public

Special Circumstances · 23-07-2015 2:59pm

To Elland Back wrote: »

In fairness, there is little chance of recovering anything from a person who owns a car of that age

(Not being arrogant, mine is a 1999)

I was going to mention a recently passed bill but it might drag the thread into liveline territory...

jimgoose · 23-07-2015 3:00pm

To Elland Back wrote: »

In fairness, there is little chance of recovering anything from a person who owns a car of that age

(Not being arrogant, mine is a 1999)

There's still less chance of recovering anything from many people with €30,000 number-plate-carriers because they're aytin' the mortar off the walls paying the finance on the sodding thing. :pac:

Cuddlesworth · 23-07-2015 3:03pm

ironclaw wrote: »

Insurance is not about the individual. Its about the risk bracket you fall into. And if you happen to have a older car that sits in with a 'high risk' group, you're going to pay through the nose or not be quoted at all. The older Bora and Audi TDI's are classic examples of this. I'm not for one second implying that someone in a 1995 is a worst driver than a 2015, I'm saying the mathematical probability is higher that the 1995 is a higher risk. Its pure math. And at the end of the day, that's all that matters to the insurance company

Yeah damm math.

At the end of the day, both companies have decided that insuring cars over 15 years old isn't going to make them money and are happily giving the business to others who want to take on the risk.

Whats the problem?

Special Circumstances · 23-07-2015 3:09pm

ironclaw wrote: »

You're missing the math behind insurance. If you have 100 older cars on the books, and 75 of them are driven by 'high risk' drivers (Young, Inexperienced), you need to load the other 25 irregardless of age / experience because the majority of your risk is caused by the other 75. Your risk profile for that age of car is high, hence you need to make up the cover for that group.

On the flip side, if you have 100 newer cars driven by 'low risk' groups (Likely someone of good driving experience being a shade older and a suitable income to support the newer car), the insurance in that bracket will be lower.

Insurance is not about the individual. Its about the risk bracket you fall into. And if you happen to have a older car that sits in with a 'high risk' group, you're going to pay through the nose or not be quoted at all. The older Bora and Audi TDI's are classic examples of this. I'm not for one second implying that someone in a 1995 is a worst driver than a 2015, I'm saying the mathematical probability is higher that the 1995 is a higher risk. Its pure math. And at the end of the day, that's all that matters to the insurance company

(I say all this as someone under 30 who has had cars as old as 1999 up until recently)

So why ask people's age, experience and claims history if the deciding factor is the cars age?

I can understand a situation where the overall "risk factor" , experience X age X claims history X car age X car type would be unacceptable.

I suspect the maths behind insurance has very little to do with logic.
Say the main cause of accidents is bad driving, and is statistically linked to inexperienced drivers, prescription medication or loss of faculties.
I would say that when the numbers are crunched, the fact that an unaccompanied learner driver in a purple 1999 ford focus has a crash due to driver error it doesn't just count against learner drivers, it also loads purple cars, all ford focuses, and all 1999 cars.
Completely illogical but I suspect this is the case, even if they were drooling down themselves on temazepam.

Bio Mech · 23-07-2015 3:11pm

Cuddlesworth wrote: »

Yeah damm math.

At the end of the day, both companies have decided that insuring cars over 15 years old isn't going to make them money and are happily giving the business to others who want to take on the risk.

Whats the problem?

The problem is a lot of people don't understand the problem. Also conspiracy theory.

Special Circumstances · 23-07-2015 3:12pm

Cuddlesworth wrote: »

Yeah damm math.

At the end of the day, both companies have decided that insuring cars over 15 years old isn't going to make them money and are happily giving the business to others who want to take on the risk.

Whats the problem?

The problem is a legal and moral obligation on drivers to have 3rd party insurance, but little restriction on what the private insurance industry can require of us before they will give it to us.

We can't all be 40yr old accountants from Wexford driving a 2009 1.0L Yaris or whatever the "best case" customer they use for calculating minimum premium is.

Cuddlesworth · 23-07-2015 3:18pm

Special Circumstances wrote: »

The problem is a legal and moral obligation on drivers to have 3rd party insurance, but little restriction on what the private insurance industry can require of us before they will give it to us.

We can't all be 40yr old accountants from Wexford driving a 2009 1.0L Yaris or whatever the "best case" customer they use for calculating minimum premium is.

So you want them to subsidise your insurance? Or would you like the government to set up a Levy for the poor oul sods who can't afford their 2009 1.0L Yaris in Wexford.

Special Circumstances · 23-07-2015 3:23pm

Cuddlesworth wrote: »

So you want them to subsidise your insurance? Or would you like the government to set up a Levy for the poor oul sods who can't afford their 2009 1.0L Yaris in Wexford.

So you think it's ok if they want us to drive Micras less than 5yrs old, while dressed as Cinderella?

Actually, they can want that all day, as long as we have the option not to and are not subject to ridiculous costs to drive a roadworthy car with a full licence and max no claims bonus. My problem is if the industry DEMANDS that we only drive Micras less than 5yrs old, while dressed as Cinderella...

jimgoose · 23-07-2015 3:25pm

Special Circumstances wrote: »

So why ask people's age, experience and claims history if the deciding factor is the cars age?

I can understand a situation where the overall "risk factor" , experience X age X claims history X car age X car type would be unacceptable.

I suspect the maths behind insurance has very little to do with logic.
Say the main cause of accidents is bad driving, and is statistically linked to inexperienced drivers, prescription medication or loss of faculties.
I would say that when the numbers are crunched, the fact that an unaccompanied learner driver in a purple 1999 ford focus has a crash due to driver error it doesn't just count against learner drivers, it also loads purple cars, all ford focuses, and all 1999 cars.
Completely illogical but I suspect this is the case, even if they were drooling down themselves on temazepam.

It would certainly appear to be a method of insurance-rating cars of various ages that suffers from a number of formal fallacies - the Illicit Minor at least springs to mind.

jimgoose · 23-07-2015 3:26pm

Cuddlesworth wrote: »

So you want them to subsidise your insurance? Or would you like the government to set up a Levy for the poor oul sods who can't afford their 2009 1.0L Yaris in Wexford.

Strawman. I suspect he wants premiums to be calculated on the basis of a deeper and more correct analysis of the statistical data by more skilled analysts with a bit of cop-on.

ShaunieVW · 23-07-2015 3:27pm

Allianz wouldn't insure my 14yo a3, too old apparently, I can easily say that my car is in much better condition that a lot of cars under 10 years old, unfortunelty though this is just another reason to put up rates. Mine already went from 520 to 770, that's the best I could do too. Unfortunetly its in that trap of too old for them to insure not old enough for classic.

curiosity · 23-07-2015 3:28pm

If the insuring of vehicles 15 years & older is so unattractive to Allianz & Aviva, what are other insurance companies going to do? Follow their lead? Hike up premiums for such cars?

Also, is this legal? I'd imagine that refusing to quote someone due to their gender, home address, occupation etc would give grounds to go the the financial ombudsman, so what about being refused due to having a road legal 15 year old car?

ShadowHearth · 23-07-2015 3:29pm

Another one move for Ireland in a road of rich getting richer and poor getting poorer.

I can't afford brand new car, so I have to drive old one, so my tax is stupidly high and now my insurance is going stupidly high, on top of that I have to do nct every year, which according to new insurance mindset means feck all.
There are so many 00" cars in Ireland that are in better shape then a good lash of 10"++ year cars out there. I can only imagine how many perfectly good cars will be pretty much scraped, because insurance companies refuse to insure then due to number plate.
What will happen to all older performance stuff? That will be pretty much impossible to insure all together.

You get at least reasonable new car prices, very low road tax, zero %%% finances in UK and North. Here driving will be pretty much extreme luxury soon.

Special Circumstances · 23-07-2015 3:34pm

jimgoose wrote: »

the Illicit Minor

Thanks for that, I knew there was a term for it, couldn't remember what it was. I'd say the Illicit Minor is pretty much the cornerstone of insurers justifications for premiums.

jimgoose · 23-07-2015 3:56pm

Special Circumstances wrote: »

Thanks for that, I knew there was a term for it, couldn't remember what it was. I'd say the Illicit Minor is pretty much the cornerstone of insurers justifications for premiums.

Statistics, like liquor, credit-cards and firearms, should be kept away from children and imbeciles.

ironclaw · 23-07-2015 4:00pm

Special Circumstances wrote: »

So why ask people's age, experience and claims history if the deciding factor is the cars age?

Because it builds the risk profile. However the car you drive might have a lot of high risk drivers or significant claims associated with it e.g. Honda Civic, Subaru WRX, Evo's. Insurnace companies don't balance the risk as a whole, the balance it in groups. Its not uncommon for an insurance company to offload (Increase premium) or refuse certain cars for quotes to lower the risk for that bracket. The sundry things such as your points, age and claims gives them some leeway to mitigate the risk and reduce your premium, however the elephant in the room is ultimately the metal cage that propels you around.

I suspect the maths behind insurance has very little to do with logic. ...
Completely illogical but I suspect this is the case, even if they were drooling down themselves on temazepam.

It has nothing to do with logic. Its pure statistics and probability which is a terrifically difficult branch of math taking about 7 years to be fully qualified. However, its also an extremely accurate measuring stick for what we pay for insurance. If you want to never have difficulty paying for your insurance again, become an Actuary :pac:

People again and again make the mistake of thinking a quote is for you, as in personalized, its not. You are just another number in a group and they're quoting you, unfortunately, based on your peers in that group.

Special Circumstances · 23-07-2015 4:18pm

ironclaw wrote: »

however the elephant in the room is ultimately the metal cage that propels you around.

Yes, I get where you're coming from but I really doubt a 14 year old Polo morphs into a psychopathic killing machine when it flips over to 15yrs old. What if all the companies decide they don't want older cars?

There's something to be said for a system where there is a max amount that group should pay for the the mandatory minimum insurance - other groups then pay a little more than they would have to spread the risk. Pretty much the concept behind insurance. (Not necessarily practical or the best way to work it, but you get what I'm saying)

ironclaw wrote: »

It has nothing to do with logic. Its pure statistics and probability which is a terrifically difficult branch of math taking about 7 years to be fully qualified. However, its also an extremely accurate measuring stick for what we pay for insurance. If you want to never have difficulty paying for your insurance again, become an Actuary :pac:

To be pedantic..
Generating data and calculating statistics/probability are not difficult. Interpreting them correctly and generating sensible and useful conclusions are.

:pac:

I don't think anyone would agree that ALL 15+ year old cars are deadly dangerous uninsurable killing machines, especially when vehicle age is not the only data point they have to calculate risk.

jimgoose · 23-07-2015 4:21pm

ironclaw wrote: »

...however the elephant in the room is ultimately the metal cage that propels you around....

Respectfully disagree, and propose that it is in fact as the old radio guys used to say, a short between the headphones. Or a loosening of the nut behind the steering-wheel.

To Elland Back · 23-07-2015 4:24pm

curiosity wrote: »

If the insuring of vehicles 15 years & older is so unattractive to Allianz & Aviva, what are other insurance companies going to do? Follow their lead? Hike up premiums for such cars?

There will be a domino effect of sorts. Even the insurers who have had a reasonable claims experience with older cars and are happy to still take them, won't want ALL of them to tilt the balance on their books. That and adding a margin because they can.

This is business, as they see it. Every insurer is identifying where they are getting hit hard and trying to remove their exposure. The title of the thread is Dysfunctional Insurance Market and that is correct to a great extent. The motorist has to take out insurance, is being made to to pay high premiums and insurers (believe it or not) are getting ridden by claims, both genuine and fraudulent/exaggerated. Insurers are highly regulated in most of the areas they conduct business and will exploit areas where they have freedom to operate. This is one such area.

As a nation, we reap what we sow

Liam McPoyle · 23-07-2015 4:33pm

ironclaw wrote: »

Because it builds the risk profile. However the car you drive might have a lot of high risk drivers or significant claims associated with it e.g. Honda Civic, Subaru WRX, Evo's. Insurnace companies don't balance the risk as a whole, the balance it in groups. Its not uncommon for an insurance company to offload (Increase premium) or refuse certain cars for quotes to lower the risk for that bracket. The sundry things such as your points, age and claims gives them some leeway to mitigate the risk and reduce your premium, however the elephant in the room is ultimately the metal cage that propels you around.

It has nothing to do with logic. Its pure statistics and probability which is a terrifically difficult branch of math taking about 7 years to be fully qualified. However, its also an extremely accurate measuring stick for what we pay for insurance. If you want to never have difficulty paying for your insurance again, become an Actuary :pac:

People again and again make the mistake of thinking a quote is for you, as in personalized, its not. You are just another number in a group and they're quoting you, unfortunately, based on your peers in that group.

Nice to see that at least a few people in here understand the fundamentals of insurance.

Do people really think insurers are doing this to try and screw people over?

If so, I'd suggest they go to the ombudsman with their complaints / concerns and let them investigate.

I can guarantee that if and when the ombudsman investigates the complaints that the insurers will have more than enough empirical data to back up their decisions and you can bet your bottom dollar that decisions like this go through their legal teams too.

Dysfunctional insurance market strikes again (older used cars in the firing line)

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