No Claims based on KM rather than Years

keithclancy

Was thinking about this one, why do Insurance companies base their no claims bonus on Years rather than Kilometers ?

E.G. someone that drives 5000km / year has far less experience than someone that drives 20000 km / year.

I even know someone that has a car insured back in Ireland that doesn't even drive so he can keep his no claims bonus there, he doesn't even drive abroad but when he comes back he'll have all of those years no claims built up.

Anan1

Someone who drives 20k kms pa would represent a higher risk than someone who only does 5k, no?

biko

Probably because it's easier to measure.
For instance, how would you know for sure the 50K driven last year in the car was by the insured and not by someone else?

Indricotherium

Anan1 wrote: »

Someone who drives 20k kms pa would represent a higher risk than someone who only does 5k, no?

A kilometre driven without incident in the city centre is probably worth more than a kilometre on the motorway too, so either way there is some unfairness in the system.

Tag every car with a trace and base no claims on a combination of obeying speed limits, city/motorway weighted kms and time would be the fairest.

But who would go for that?

Anan1

Indricotherium wrote: »

But who would go for that?

Not me - i'm happy under the current system.:)

Interesting ideas, though.

munchkin_utd

Anan1 wrote: »

Someone who drives 20k kms pa would represent a higher risk than someone who only does 5k, no?

indeed!

my german insurance actually works this way and has a km limit on it and every 3000km extra over the 9000km basic coverage costs me 50euro a go or so (IIRC)

EDIT: they can add more coverage mid term on the fly by just ringing them up so its a handy enough system

rusty_racer94

Because it's easier. Policy ends, bonus earned.
For instance a person who driv0se 5000 km of mountain roads will have far more experience than a person doing 2000 km of City driving.

Mully_2011

Indricotherium wrote: »

A kilometre driven without incident in the city centre is probably worth more than a kilometre on the motorway too, so either way there is some unfairness in the system.

Tag every car with a trace and base no claims on a combination of obeying speed limits, city/motorway weighted kms and time would be the fairest.

But who would go for that?

But that would just tell you about the car not whos driving it.

Henry Ford III

Imagine trying to ascertain by declaration how many miles p.a. folk would have driven.

The clocking business would grow huge! There'd also be a new phrase on private sale
ads...."100000000000 kmls on the clock, but most of those were for NCB boosting".

p.s. The current system is fine I think.

Indricotherium

Mully_2011 wrote: »

Indricotherium wrote: »

A kilometre driven without incident in the city centre is probably worth more than a kilometre on the motorway too, so either way there is some unfairness in the system.

Tag every car with a trace and base no claims on a combination of obeying speed limits, city/motorway weighted kms and time would be the fairest.

But who would go for that?

But that would just tell you about the car not whos driving it.

Tie it to a thumb print, I don't know, be creative.

MrDerp

Insurance companies have a lot more trouble on their hands trying to report on their asset coverage for their potential liabilities.

The last thing on their mind is spending the Analytics budget on reporting and profiling individual driving usage to come up with a more fair system of pricing policies.

The feedback to their systems on projected liability works just fine, classifying and grouping us by gender, age, profession and years without an accident.

CiniO

Anan1 wrote: »

Someone who drives 20k kms pa would represent a higher risk than someone who only does 5k, no?

I doubt that.
Plenty of example around me, which prove opposite.

I drive way more than my wife (over last 10 years I probably did 10 times more mileage than her) but it was her who crashed our car.
In place where I work, there isn't a month that some fellow worker crashed his/her car. But it's nearly always nearly people who drive very little who crash, while those who do big mileages rather don't.

keithclancy

Anan1 wrote: »

Someone who drives 20k kms pa would represent a higher risk than someone who only does 5k, no?

The higher amount of kilometers you will drive in the year after taking out the policy would increase the risk. However someone with more kilometers of driving experience would be less likely to have an incident.

E.G. You declare you will drive 20000 km for the year, you have 100000km of Claims free driving so get a discount for that.

Whereas someone that did 5000km previously and wants to do 20000km this year would get less of a discount since they have less experience.

The amount of KM's you drove in the past isn't a risk for the insurer, only what you will do in the future, the amount of experience you gained in the past reduces this risk since you have more experience.

OSI wrote: »

That still doesn't tell them what driver racked up what miles though. And would you really want to have to drive to the insurance company office every year for an odometer reading and thumbprint for every renewal and for every time you change cars? What if you drive multiple cars? It's a nice idea, but falls apart in too many ways.

This is only really a problem when a person is buying a car, surely an Insurance company could utilise the same database that motorcheck and the like use. Just incorporate the KM's / Reg into your NCB Cert, there would only be so many Kilometers available on the clock so I wouldn't make sense for someone to give someone else their Kilometers.

Anan1

CiniO wrote: »

I doubt that.
Plenty of example around me, which prove opposite.

I drive way more than my wife (over last 10 years I probably did 10 times more mileage than her) but it was her who crashed our car.
In place where I work, there isn't a month that some fellow worker crashed his/her car. But it's nearly always nearly people who drive very little who crash, while those who do big mileages rather don't.

Is your wife really ten times more likely per km driven to crash than you are? A quick google indicates (assuming you're an average driver) that that's the equivalent of driving around with a BAC of over 0.1, ie well over the limit!

djimi

CiniO wrote: »

I doubt that.
Plenty of example around me, which prove opposite.

I drive way more than my wife (over last 10 years I probably did 10 times more mileage than her) but it was her who crashed our car.
In place where I work, there isn't a month that some fellow worker crashed his/her car. But it's nearly always nearly people who drive very little who crash, while those who do big mileages rather don't.

Its simple law of averages; the more time you spend on the road the the more likely you are to be involved in an incident. Its nothing to do with experience or ability or anything like.

ninty9er

Premia are paid annually, therefore your no claims is based on no claims based on premia paid. That's my logic anyway.

Risk of payout is only adjusted once annually.

dgt

How do you differentiate between motorway miles and back road driving?

I put up approx 15k miles but most are on crappy boreens and R roads...

Anan1

dgt wrote: »

How do you differentiate between motorway miles and back road driving?

I put up approx 15k miles but most are on crappy boreens and R roads...

Back roads are way riskier than motorways.

keithclancy

ninty9er wrote: »

Premia are paid annually, therefore your no claims is based on no claims based on premia paid. That's my logic anyway.

Risk of payout is only adjusted once annually.

So with my colleague, he hasn't driven in 5 years, pays Third Party on a shít heap parked up in his dads place at home and has 5 years no claims.

Whats the risk of him having an accident if he went back driving next year vs a person that has 5 years of actual driving experience ? They both have the same NCB Discount.

dgt wrote: »

How do you differentiate between motorway miles and back road driving?

I put up approx 15k miles but most are on crappy boreens and R roads...

Does that matter ? since the current system doesn't take that into account anyway.

Indricotherium

keithclancy wrote: »

ninty9er wrote: »

Premia are paid annually, therefore your no claims is based on no claims based on premia paid. That's my logic anyway.

Risk of payout is only adjusted once annually.

So with my colleague, he hasn't driven in 5 years, pays Third Party on a shít heap parked up in his dads place at home and has 5 years no claims.

What the risk of him having an accident if he went back driving next year vs a person that has 5 years of actual driving experience ? They both have the same NCB Discount.

dgt wrote: »

How do you differentiate between motorway miles and back road driving?

I put up approx 15k miles but most are on crappy boreens and R roads...

Does that matter ? since the current system doesn't take that into account anyway.

Chances are your colleague has not saved himself any money if it's been 5 years??

How would it be policed? Sure someone else could be driving your car for instance or people could turn the clock forward for any inspection etc etc.

I dont even know why companies ask how many kms you do a year, sure they have no way of proving how many you did if you go over what you said.

keithclancy

Indricotherium wrote: »

Chances are your colleague has not saved himself any money if it's been 5 years??

He said it would take him 12 years maintaining his NCB before the cost of the premium over the years would be equal to a new policy with Zero NCB.

He also mentioned taking gaps, unsure of how long but he said there was a period you were allowed before you would lose your NCB.

dgt

Anan1 wrote: »

Back roads are way riskier than motorways.

That's my point...

Person A does 50k miles a year, 48 of which are on motorways.
Person B does just 8k, all on boreens of Co Kerry, for example...

keithclancy

Matthias Defeated Cargo wrote: »

How would it be policed? Sure someone else could be driving your car for instance or people could turn the clock forward for any inspection etc etc.

I dont even know why companies ask how many kms you do a year, sure they have no way of proving how many you did if you go over what you said.

Wouldn't that combat clocking, you'd be taking thousands of euro in value clocking your car when someone runs a motorcheck on it.

keithclancy

keithclancy wrote: »

Wouldn't that combat clocking, you'd be taking thousands of euro in value clocking your car when someone runs a motorcheck on it.

You can be sure nothing would be logged correctly and it would go down as a misprint or mistake by motorcheck.

Anyway I think its needlessly complicating the whole thing, works fine as it is no need to change it.

keithclancy

OSI wrote: »

Put it forward for inspection, back for sale. If you've no qualms about clocking it for a sale, you're not going to be to bothered by clocking it for an insurance quote.

Yes, but say you only have 20,000km on the car and you clock it forward to 100,000km for inspection, then clock it back to 20,000km.

If anyone runs a motorcheck at purchase they'll see it was last inspected with 100,000km on it.

Or indeed, you have an accident and your odo reads 25,000km, last inspection was 100,000km, insurance doesn't pay out as you made a fraudulent declaration.

Bit of a risk to save a bit of money on Insurance, self policing imo.

Matthias Defeated Cargo wrote: »

You can be sure nothing would be logged correctly and it would go down as a misprint or mistake by motorcheck.

Anyway I think its needlessly complicating the whole thing, works fine as it is no need to change it.

Current system works fine ?? :pac::pac::pac::pac:

keithclancy

keithclancy wrote: »

Current system works fine ?? :pac::pac::pac::pac:

I dont see any problem with the way it works, its how it works around the world, well in anywhere I know of anyway.

So what if a tiny tiny percentage of people are nursing their no claims, its not worth changing the who system for a few. Also you never know when it might be advantageous to yourself to be able to keep insurance running and still keep up your no claims. Say you broke a leg and couldn't drive for 8 weeks, you would be sorry then if that was going to hit you in the pocket come next years renewal.

CiniO

djimi wrote: »

Its simple law of averages; the more time you spend on the road the the more likely you are to be involved in an incident. Its nothing to do with experience or ability or anything like.

But that law of averages is not as straight forward as you say.

Obviously that's logical that someone spending twice more time on the road is twice more likely to crash (as he has twice more occasions to do so).

But you can't forget, that the more you drive, the more experience you get and that causes you to be less likely to crash.

It's definitely not as straight forward as you say.

CiniO

Anan1 wrote: »

Is your wife really ten times more likely per km driven to crash than you are?

I don't know.
TBH it's a bit nonsense to estimate how likely is someone to crash, as it's nearly impossible to say.
But in our case (me and my wife) it looks like she is 10 times more likely to crash.

A quick google indicates (assuming you're an average driver) that that's the equivalent of driving around with a BAC of over 0.1, ie well over the limit!

It's again bit nonsense conclusion.
You would know for sure, if you took f.e. 100,000 sober drivers, and then 100,000 drunk drivers (with BAC of 0.1%), give them the same car, and ask to drive exactly the same route at exactly the same conditions.
Then if f.e. 5 sober would crash, and 50 drunk would crash, that would confirm the fact.
But I doubt anyone ever done such experiment.

Pa Dee

keithclancy wrote: »

Was thinking about this one, why do Insurance companies base their no claims bonus on Years rather than Kilometers ?

E.G. someone that drives 5000km / year has far less experience than someone that drives 20000 km / year.

I even know someone that has a car insured back in Ireland that doesn't even drive so he can keep his no claims bonus there, he doesn't even drive abroad but when he comes back he'll have all of those years no claims built up.

Impossible to validate I would have thought

keithclancy

Pa Dee wrote: »

Impossible to validate I would have thought

Like is impossible to validate if someone has been driving the Kilometers they drive ?

I.E. I pay a premium for 40,000km/year, should I just register it next year as 10,000km and clock the car to save 50-60% ?

Course I wouldn't, because the Insurance company wouldn't pay out, they'd just have to check the APK (NCT) records vs the ODO Reading.

Insurance companies already quote you a premium based on the amount of kilometers your going to drive in a year, so why do they bother if they can't verify it anyway ?

Indricotherium

CiniO wrote: »

djimi wrote: »

Its simple law of averages; the more time you spend on the road the the more likely you are to be involved in an incident. Its nothing to do with experience or ability or anything like.

But that law of averages is not as straight forward as you say.

Obviously that's logical that someone spending twice more time on the road is twice more likely to crash (as he has twice more occasions to do so).

But you can't forget, that the more you drive, the more experience you get and that causes you to be less likely to crash.

It's definitely not as straight forward as you say.

But you as an individual are still more likely to have an accident the longer you are on the road.

I don't think mileage covered beyond a certain amount really counts as experiance either. Once you have the first 10k under your belt do you learn as much from the second??

CiniO

CiniO wrote: »

But that law of averages is not as straight forward as you say.

Obviously that's logical that someone spending twice more time on the road is twice more likely to crash (as he has twice more occasions to do so).

But you can't forget, that the more you drive, the more experience you get and that causes you to be less likely to crash.

It's definitely not as straight forward as you say.

It can work the other way too though, people who spend a lot of time on the road may get an inflated opinion of their ability to drive based on the fact they drive so much which may lead them to concentrate less, take more risks etc.

keithclancy wrote: »

Like is impossible to validate if someone has been driving the Kilometers they drive ?

I.E. I pay a premium for 40,000km/year, should I just register it next year as 10,000km and clock the car to save 50-60% ?

Course I wouldn't, because the Insurance company wouldn't pay out, they'd just have to check the APK (NCT) records vs the ODO Reading.

Insurance companies already quote you a premium based on the amount of kilometers your going to drive in a year, so why do they bother if they can't verify it anyway ?

The NCT was done in my car before I bought it and its not out for 2 years, how can they make any accurate judgment on what mileage you covered based on that. In Ireland I would not be worried at all about going over the miles per year you tell them, they really cant prove anything when it comes to miles covered imo.

It doesn't matter anyway as entering less miles doesn't appear to make any difference to premiums as far as I can see in Ireland anyway.