When I was a mere slip of a lad, at just 17, I remember listening to a friend of my brother on the phone to his insurance company, and I was amazed at just how little he paid for insurance. His wisdom rang a bell – it’s all about age: “Your insurance will drop when you’re 21, then again when you’re 28, and when you reach my age … you’ll hardly pay a thing for it”.
I’m nearly 48; I’m still waiting for these non-existent premiums. I have a clean licence, 30+ years of experience, the car isn’t anything special, low value, and yet it still costs me £500 per year to insure. I feel like I’ve been scammed somewhere, only without anyone breaking the law.
I had a motor traders policy for years, earned good ‘No Claim Discount’, and yet when I finally switched from trader to private, that NCD bonus was all for nought … it counted for literally nothing; the years spent driving British, Italian or German exotica, and never damaging one meant in the eyes of the insurance company, I was a risk. Seems legitimate.
Insurance scams
Insurance is a legal requirement, there’s no getting away from that, and I have no issue with it. But that seems to mean that the insurers are given carte blanche to do anything they like, and if you dare deviate from their agreed terms, they’ll stop your insurance, or charge you a hefty fee.
It would seem that being an insurance company is as close to having a licence from the Treasury to print money, as you’ll ever find. Just three insurance companies – Admiral, Hastings and Direct Line have raked in nearly £300m in just six months through upselling and loan charges (the ‘loan’ referring to customers that pay monthly). That figure doesn’t include the standard policy.
According to comparison website GoCompare, a typical 30-year-old male driving a Ford Focus could be paying as much as £500 more for the same level of insurance through one of the more expensive companies, and that’s before adding any extras such as breakdown or legal cover. That figure is an average, the cheapest quote was £527.37, the most expensive was £1,207.43.
And let’s not even start down the road of automatic renewals without comparing prices.
Added extras
There’s also an issue over fees – some companies are charging as much as £300 to cancel a policy early, although the average is closer to £60, but even then, surely you’d have that thought that if the insurance company are no longer covering the risk, no more money was due? Carte blanche to charge what they like.
In cases where the consumer pays monthly, it’s understandable that interest charges are due; effectively, they’re borrowing money and using a service, and just like any other service provider or money-lender, you pay for that service. However, the charges are often extortionate, with many consumers feeling that the insurance companies are deliberately misleading them with false APR rates.
Labour MP John Mann states: “Consumers are being misled by confusing information into paying much more than they should for monthly payments”. It’s a practice that needs to stop.
Profiteering
Of course, very few businesses go into business to deliberately just break-even, but at what point does turning a profit become profiteering? It’s a closed market, you have to have insurance to use the vehicle on the road, and therefore, just the same as the ULEZ, fuel duty and VED, there’s no choice but to pay.
The big question is that if XYZ Company can offer comparable cover for nearly £700 cheaper, why can’t the others? Most business is done online, with electronic quotes, purchasing and documents, all automated with technology. Yes, there will be some extra overhead to cover for the bigger companies, but 150% more expensive?
In 2018, Direct Line made an operating profit of just over £600m, Hastings was £152m and Admiral were just under £480m. That’s not meagre by any standards. With the advent of ‘Big Data’, insurance companies are able to better identify risk, both for vehicles and people, but that’s just led to further confusion; gone are the days of ten different insurance groups (one being the cheapest, ten the most expensive), we now have fifty.
And yet despite all of the extra data, the narrower groups and wider choice of insurers, an insurance policy seems more expensive today (in relative terms) than it ever has been. I know from my years in the trade that vehicle repairers tend to make the most of the opportunity to charge an insurance company, but perhaps if the insurance industry clamped down on that practice, they could reduce policy prices somewhat for their faithful customers?
Do you feel that insurance companies are running a legal scam? Have you any good experiences to share? Or perhaps you feel that it’s just another expense that has to be paid, so why worry? Let us know in the comments.
If the government has decreed that vehicle insurance is compulsory, (and I agree it should be) maybe they should provide it. Perhaps a basic level of cover needed to comply with the law, then other providers could offer the additional optional cover. Surely this could be a way of boosting the government’s coffers rather than the money going to line the pockets of private company investors.
That’s too sensible. 🙂
A friend suggested 20 yrs ago that the government should put third party cover on the cost fuel, leveraging their massive economies of scale to shrink cost and distribute risk. Insurance companies can still sell Fire, Theft & fully Comp etc. as top-ups, competing for that business. Everyone paying for legitimate taxed fuel would paying for insurance thus eliminates the uninsured (which we pay a premium for currently). Dangerous driving rules might need to be beefed up and/or applied. Non UK registered vehicles would need to arrange cover and bring a certificate with themselves.
The fear is a stealth tax on fuel, but make the OBR account for each penny and publish accounts within 30 days. Implementation would be as simple as tweaking the VAT receipt of each pump.
The only insurance you have to have so they just have a licence to have your pants down. They are making as much money as they can for now till we are forced out of our cars and made to use public transport. Who’s our leader, Kim jong?
The very high prices tend to be charged to people who do not make the effort to shop around at renewal time and gradually see their premium increasing – it’s not illegal, just opportunistic. If everybody kept an eye on their renewal costs, then the market would flatten out and instead of trying to compete on price, insurers might compete on service levels
Just been hit with a £191 bill to cancel my hastings bike policy early not happy, can they do this legally or will we someday be pursuing insurers for unfair charges akin to the PPI scam and unfair bank charges
Avoid using Hastings — this is their specialty to screw their customers.
Check the (very) small print.
The correct word, as you have alluded to in the article, is “profiteering”.
If I can’t trust the insurance company I’ve been with for several years to give me a fair deal – loyalty discount, added no-cost-to-me features, and so on, but instead I am ripped off as “just another sucker” for staying with them, then what else are they but sharks?
It would be good if there were laws to protect us, but since most politicians and members of government have their fingers (up to the wrist!) in this financial investment pie, I don’t see anything happening real soon.
Combined with deliberately convoluted policy rules and get-out clauses, These are happy times for insurance companies.
The insurance equivalent to a credit union would work, and would be a damn sight cheaper too!
There is no such thing as loyalty as far as insurance companies are concerned
I have just renewed my fully comprehensive insurance with LV. I am 67 years old and haven’t claimed for about 20 years. My car is a Ford Focus first registered in 2000. I paid £189. It has come down about £50 from last year. When I went on comparison sites the prices quoted were ridiculous. The lowest was about £300 up to £500. Thank you LV
Liverpool Victoria is consistently outstanding in their sensible level of premiums.
See comment previous to yours
You will be in for a shock when you turn seventy Jim, they think we are all borderline gaga and therefor right for the fleecing, mine went up by a third at renewal in spite of an exemplary driving record, when I questioned the increase I was informed that I was classed the same risk as the average twenty five year old.
They are definitely taking the proverbial!
I too have just gone with LV… Two cars valued at £30000. We are both pensioners with good No claims discounts. The price was £563 for both cars. For a change I think we have got a fair deal.
We were with Direct line previously and my car was on automatic renewal and they increased the premium by £170. My wifes car was not on automatic renewal and that went up by £40. Direct line because of there greed lost our business. Loyalty does not exist with these companies
Same for me. I’m 66 with an Audi S3. Renewal direct with LV= slightly cheaper than last year and over £100 cheaper than comparison sites. Well impressed with LV=.
While returning home from work one evening I was involved in a rear end collision that was deemed to be my fault and on the surface it would seem that, that is the case. I lost 5yrs NCD and my premium doubled. Serves you right you might say.
Well some years later I found out that the woman driver who decided to suddenly give way to oncoming traffic when she had the right of way, actually didn’t have a license so has had no formal driver training and also wouldn’t have been insured, so the question is who claimed on my insurance because I didn’t and she couldn’t, but I was legally bound to report the accident to my insurance company who quickly took advantage of my honesty. For the record my premium has never returned to what it was no matter who I insure with. At that time I held 3 full licenses and 10yrs NCD on Motorcycle, Car and HGV 1. She had nothing and from what I saw had no idea how to use the road yet she gets away Scott free.
I feel very strongly that the insurance companies should be regulated . I have had an unblemished licence for 40 years but because someone went into the back of me causing my car to be a write off even though their insurance paid for all my expenses and did not affect my no claims bonus , my insurance has gone up by nearly £200 per year and will continue to be held against me for the next 5 years .
How can they get away with it ?they are literally stealing from their customers and should be dealt with as the criminals they are !!!!
Similar story with me Janice. I was ‘T’ boned whilst on a round about, the other driver failing to stop instead just crashed into the near side of my car righting if off. Even though their insurance company admitted liability, it took 20 month for them to pay out. Personal injuries still on ongoing. I obviously notified my insurance company, even telling them I was claiming directly from the third party. But, when my renewal came up my premium went up by £128.00. Now when I go online to compare other companies, because insurance companies on the on-line forms now ask if you have had an accident in the past 5 years, whether your fault or NOT you end up in a catch 22 situation. Why should one be penalised for honesty? I did not even claim though my insurance company, so it cost them nothing.
Last year I was in a collision with another car, which wasn’t my fault as the third party admitted fault, I informed my insurance company Hastings Direct who then passed me on to another company – Auxillis, who wouldn’t proceed with my claim unless I accepted their long list of terms and conditions and extra costs which weren’t explained to me at the time of the insurance policy purchase, basically my hands were metaphorically tied, Auxillis also demanded that I take out a hire car with them while my car was being repaired at my extra expense. I later found out that Hastings Direct and Admiral Insurance are only brokers and not a company who provide Insurance. There is a lot of misinformation or possibly miss-selling on who can provide insurance or are just the middleman, beware.
Hastings will take you directly to personal losses.
I have just received my renewal notice for my car insurance and after reading the extortionate amount they want, rang to ask why. Last year I paid £309.12, yet this year it was quoted as £420.00. When I asked why, I was told it was due to a claim in Aug 2018 but we did not make a claim – all I did was inform them via email and video’s of the cars, of an incident where there was no damage to either car, just in case the other person decided to try to claim. They took the information off and reduced the renewal to £332.??, with me as the main driver.
As my husband does most of the driving now we are retired, I asked if I could change him to being the main driver – this increased the premium to £352.56 and I asked why it should go up £20 (approx) when he has been driving since he was 17, held an international HGV and has way more experience than me, I was told it was because he is 73, which is 2 years older than me! So remember, as you get older your insurance can go up by £10 for every additional year – just for living.
The next query was regarding the mileage as I had noticed the wording on the policy said ‘No more than 6000’. When I asked what would it cost if I did 6001 miles I was told there is a leeway of maybe 500 miles but it is more to do with if a claim is made – if you go too far over the mileage then you will be charged (or possibly not paid out?). As a precaution I asked what it would cost if I increased the mileage to 7000 – this would increase the premium by nigh on £6.00 – for a thousand miles!!! So I ended up with a final quote of £358.40 and this was the best they could do.
So now my car is older and worth less than last year; the main driver is more experienced than the one on last years policy, albeit 2 years older; the mileage has increased by 1000 miles but is still low and the premium has increased by £49.28 for the year – and this is supposed to be value for money!
Needless to say, I am looking around for quotes as I am sure I can find the same cover cheaper as most motorists can, it just takes time and a bit of effort, which can be well worth it.
I had been with the same brokers for 60 years. Last year they were bought out by another company. When my renewal came up it was quoted by the new company at £738 because of my age. Previously my policy with the other brokers was £328 fully comp.
I checked prices on line and discovered Liverpool Victoria car insurance. Because my home is insured by LV I qualified for their Multi Use cover, my premium came back as £348 fully comp. worth checking first if your home insurance company runs the same scheme, if not, check what LV would charge and see if you would save on both home and car insurance.
No such thing as rewarding loyalty with Insurance companies is there? Good luck with your search.
Im impressed with LV…… For this year anyway
There is some naked profiteering out there, but there’s enough competition to keep premiums as low as other factors allow them to be as long as you shop around. The real problem is the factors that drive prices up in the first place.
What’s needed is better accountability when a crash/claimable incident happens.
The vast majority of crashes are one or more party’s faults – this doesn’t necessary imply that the “vast” majority of crashes are a driver’s fault (though “a” majority are). It could also be the registered keeper (insufficient maintenance or communication of a cars limitations to the driver), manufacturer (driver tried to behave correctly but car failed to do what it should have done given what the registered keeper did to look after it), or indeed even the parent of the identified kid that threw a brick through your window (in the latter types of cases it’s about the insurance company getting the full cost off of them directly).
With all the technology out there, we are getting very close to the point where it is viable to prove fault in a sufficient majority of cases to move away from the current system where being the innocent victim is irrelevant and your premiums will skyrocket because there was a claim. This is what should change. With all the talk about technology and 2022, this would in my opinion be the right time to simultaneously introduce an insurance change which is actually on the law-abiding driver’s side.
To expand on that a little bit, the change I would make would be to reduce the amount of time you have to declare all incidents regardless of fault should be one year (so, even if an incident was proven not to be your fault you’d still have to announce it at the first renewal – at the end of the day a claim does cost both insurers).
But you should have to declare it for three years in the event of no fault established (i.e. it was genuinely a 50/50 or there was nothing to prove your version of events) and ten years if it was your fault (i.e. the dashcam shows that you directly caused the incident by driving like a maniac).
I was recently bumped in a car park by a woman trying to park next to my. I notified my insurance company and was told to get estimates. Very body shop I tried I got the same response as soon as I said insurance claim . None of them wanted to know “insurance companies want the work done for nothing and not pay for it for at least six months “.! In other words insurance companies are trading with other peoples money. Avery dirty and underhand way of trading. I paid cash from my own pocket ,got a first class repair, but then had to put pressure on my insurers to get my money refunded.I am insured with one of,if not the biggest companies in Britain.John Lucas
Inflated repair cost is one reason complex technology is another. A simpler vehicle and more realistic approach to repair cost is needed. ie I was quoted just short of £1000 for a bumper repair which i did myself with kit from Halfords for £30.
My car is 17 years old. What the hell makes them think I want a part that costs more than the car is worth? Get it from a scrapyard, like I do!
Scott’s post below, regarding Hastings is quite right. Hastings used to come up trumps on the comparison sites a few years ago, which was when I used to be them, but in the past two years they’ve just wacked up their prices to fall into line with all the other scam insurers. Eventually I dumped them and went back to the comparison sites where Axa quoted me £150 a year less than Hastings for the same policy. The answer is simple…………. Just go to one of the comparison sites, select the cheapest most well known insurer and sign up.
The big companies only get big because we fall into the automatic renewal trap and feel we owe them our loyalty. We don’t owe them anything and never will.
I drive a Nissan Leaf 2017, I recently re insured with PlugInsure. £325, that covers 3 people to drive it. I reckon that’s a fair deal.
I’m a truck driver because I had a bump in my truck which was not my fault my insurance went up by £120. For the year
I remember the time when the standard car policy covered any driver including learners driving with the permission of the policy holder you paid extra to be the only driver I believe
It seems that it is really nothing more than a protection racket. We have no choice but to submit and pay up. I thought that this had been outlawed long ago.
I have stopped buying ALL insurances because of the cons, but we are understandably forced to have car insurance. Generally we buy once a year, they do nothing else and use their knowledge to rip us off. They have absolutely no interest in settling a claim unless it is to there advantage. Just one of the situations I was involved in was taking a photograph of somebody hitting my car, with the number plate in the photo. This took me three years of me chasing them, every year they charged me higher loading’s/premiums, and they promised to return these when it was all finally settled. Eventually I had it completely investigated., and I found the other driver was only sent one letter, which had been ignored, then she conveniently disappeared. The company did nothing further apart from giving me the runaround, and taking my money. Eventually the return of extra premiums, excess was absolutely tiny. You cannot really win with them as they know every wrinkle.
I never buy on line, they ask three times more information. I shop around every year and always get a much better deal. I always use a small to medium BROKER who really want your business, they then buy COVER from all the top companies. I have one daily transport, and two classic cars of minimal value, compared to a average daily car. I only have myself driving each car but it is impossible to get all together cover. Physically I can only drive one car at any one time. We are all cattle to be milked of premiums, taxes, fines, cheap labour, excreta, excreta. This is by the elite manipulators who avoid paying anything into any system. because they are able.
Yes , without doubt. The insurers have you over a barrel and can charge what they
Iike. I do shop around but paying monthly usually means an exorbitant interest rate is added.
Time legislation was amended to force insurers to be transparent about how rates are calculated and limited as to levels set.
Having driven Transit Vans for over 45years and not made a claim and accumulated a decent
No Claims Bonus,I bought a car and insured it with Hastings using my No Claims Bonus.Then having got
a reasonable insurance quote from Hastings I proceeded to send of my No Claims details from my previous
insurer only to be told that any No Claims Bonus accrued through the vans was not applicable (news to me).
In this event I would need to pay another £350 or so.
I subsequently decided to cancel my policy and go elsewhere to which they agreed on payment of £147.
Insurance companies move the goal posts at every opportunity
A car hit me on a back road and “apparently” I was 20% responsible because I was there, if I wasn’t he couldn’t have hit me!
As an aside I pay between £150 & £200 for insurance for my diesels 800cc, 1050cc and 3000cc camper I’m 70, I don’t remember paying more that £200 for 20 years or more..
I’m not trying to be clever just that I always argue for a better price or change insurers currently with Geffery Insurance who say that the following years insurance will be cheaper or at the same rate – assuming you haven’t rammed anything.
All that said its always fine until something happens.
The insurance renewel is always increased whatever the circumstances. I always go on Go compare and most times find the best quote is with the same insurance company but much lower-if you ring them up they will check that the details are the same on both quotes and match it-I always get a reduction in the the quote so it is worth ringing them up and saying you are going to cancel because you have found a cheaper quote-you will need the quote number from the comparison site so they can check it
It also annoys me that when you have points for speeding-after 3 years they come off your license but it is 5 years before they come off the insurance-surely this isn’t fair. I also think that 5 years is a long time for any claims to remain on your insurance too-even when they didn’t pay out because you had to pay the excess
Hi Pauline. I had a very minor accident in 2015 and as there was no claim made be either of us my insurance did not increase my policy the following year. I changed to Saga last year and they added £50 on just because I had had the accident, never mind that there was no claim. I have been driving for over 40 years and that was the first accident I had in all that time. Maybe we should all get on the our MP’s or get a parliamentary petition going??
Good idea I will add this to my insurance file and try it on renewal. We rarely win against any insurer, but we must try. See my earlier comment, why I don’t like going on line plus the following year or earlier I keep getting pestered with offers for renewal from other insurers on anything, even more wasted time. My classic cars insurance has to be specialized.
Unless, as is the case of car insurance, cover is compulsory I NEVER buy insurance. I have the belief that ALL insurance companies are thieves. The BIGGEST scandal in recent years is PPI. What does the ‘I’ stand for in PPI. For small items I simply ‘self insure’. If it fails in the first twelve months then I call on the warranty to replace it. After that the I’ll just have to bite the bullet and buy a new one. My TV is fifteen years old and still going strong, £180 in premiums saved. That is why I will always refuse the offer of an ‘insurance based’ extended warranty. They are simply not worth the paper that they are written on. I too have suffered the fate of a stupid rating system. When I declared that I had retired, after 42 years as a heavy goods vehicle driver, my insurance went up. Needless to say I am no longer with Hastings Direct.
Keith. Why don’t you have life insurance – someone will have to pay for your funeral eventually. Also why not house and contents insurance?
when i firt had car insurance the cover included car replacment , legal cover etc BUT now they are extras
Because of my age, 88, for years I have been having to fight to get my car insurance below £1000. I have found that combining the car insurance together with house insurance, with Admiral, I got a better deal for both. But never in the mid hundreds for the car alone. I have not been able to find an answer to why my car insurance is always so high. I annually go through all the usual web sites find the best value and cheapest deal.
Insight driver
Similar story with me Janice. I was ‘T’ boned whilst on a round about, the other driver failing to stop instead just crashed into the near side of my car righting if off. Even though their insurance company admitted liability, it took 20 month for them to pay out. Personal injuries still on ongoing. I obviously notified my insurance company, even telling them I was claiming directly from the third party. But, when my renewal came up my premium went up by £128.00. Now when I go online to compare other companies, because insurance companies on the on-line forms now ask if you have had an accident in the past 5 years, whether your fault or NOT you end up in a catch 22 situation. Why should one be penalised for honesty? I did not even claim though my insurance company, so it cost them nothing.
Everyone wants your hard earned cash it’s a cruel hard world, it has to stop.
Whatever happened to thou shall not steal!
Rip off world!!!
Reading these comments is so depressing! I dread ever having to make a claim!
Why do renewal prices come out at anything up to more than 30%dearer than the original price. It is essential to shop around
I cancelled my car policy 3 months after taking it out as I no longer needed a car and it cost me £60 for the pleasure and no refund whatsoever.
Autorenewal is also ripping customers off…in the event of me being disabled or otherwise not able to respond to an auto renewal correspondence, money is taken from my bank account without my permission. It is the vehicle owners responsibility to make sure their vehicle is covered by insurance and not the insurance companies.
I changed a Jaguar XF for a Jeep and my insurance company charged me admin fee and an extra £70 they also added £70 to my renewal price so went to new insurance company at renewal time
changed my car at new company from jeep to E-class Mercedes (Ps. I change my car every year) and sure enough they did the same thing
They added £70 to the Admin fee of £25
Do they all do that now ?
You cannot win as you have to have car insurance , So they can charge you anything
My Sons car was hit whilst it was parked outside our house as he had come for dinner. A neighbour backed out of his drive into it. Fortunately the neighbour knocked on the door and owned up. The neighbour put the claim through his insurance company and as we knew him our Son did not go through his. He was later advised to inform his own insurance company as they may take exception if he did not. Other than that phone call they were not involved.
Next renewal date they hiked his premium by a large amount as he was a now considered a risk, although at his own home he parks on his drive.
I don’t think that insurance companies should penalise you when you at “no fault”. That is a scam.
Insurance companies always have a pot to dip into to give a bit extra discount, I know its not as much as they put on initially but every little helps, so when you ring up to renew or pay your premium always ask a question about the cost and say “well I was going to renew but I will just do a bit more homework and try a few comparison’s, that is when the pot is unlocked, it has worked for me every time”
Try it and see how much you can get in discount.
THEY ALL KNOW WE MUST HAVE INSURANCE, AND I AT SEVENTY THREE DRIVE JUST AS WELL AS I DID WHEN IWAS THIRTY, IF YOU SEE A ACCIDENT CAUSED BY A ELDERLY DRIVER ITS ALWAYS OVER REPORTED BY THE MEADEA AND THE POLICE , THAT IS WHY INSURANCE COMPANIES HAVE SEEN A LOOPHOLE TO CHARGE THE ELDERLY MORE GET US OFF THE ROAD, IF YOU ARE ON A PENSION YOU YOU CANNOT AFFORD TO BE RIPPED OF , DOCTORS KNOW IF YOU ARE FIT TO DRIVE LEAVE IT TO THEM , AUTOMATIC CARS SEEM GOOD FOR ELDERLY DRIVERS , BUT THE PROBLEM IS TWO PEDDLES ONE TO STOP AND ONE TO GO THIS IS THE MAIN CONTRIBUTION TO MOST ELDERLY DRIVER ACCIDENTS
Insurance companies are in a no-lose position. Car insurance is compulsory, and they get to control the agenda. They get to ask ALL the questions and the driver has no information about the consequences of the answers they give: – If a car driver has a no-fault accident and claims only on the other driver’s insurance (at no cost to his insurance company), when it comes to renewal the insurance company counts this as a ‘claim’. The driver is penalised against his no-claims bonus for this accident regardless of fault. The insurance company assumes that the innocent driver is ‘an accident magnet’ and a higher risk for them. Their premium is increased! How fair is that!! If insurance has to be compulsory it should also be transparent and fair
I am very pleased with NFU at present- very supportive after I was t-boned at a slow speed thankfully! Fingers crossed for next years policy.
One Call Insurance – avoid at all costs; not transparent, full of gimmicks, are twisting the review site Trust Pilot to favour them (phone staff offer customers ‘cheaper 2nd person ins.’ benefits for 5 star reviews) …you could be in a phone queue for an hr, they re-new without permission, then charge 50 to cancel.
Saga has been my cheapest, transparent & best value