I wouldn't like it but I understand it. It doesn't matter the reasoning but there is a link there. It's not a conspiracy by the insurance companies or at least one of them would exploit it and steal all the business. The reason for the connection is irrelevant, there's a statistical link so premiums go up. Simple
Someone crashed into my car :(
- Thread starter Amos91
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I wouldn't like it but I understand it. It doesn't matter the reasoning but there is a link there. It's not a conspiracy by the insurance companies or at least one of them would exploit it and steal all the business. The reason for the connection is irrelevant, there's a statistical link so premiums go up. Simple
I understand that the statistics are there, but I can't see why someone in a situation like the OP should have his premiums go up because of someone else's mistake. He wasn't involved, so wasn't a factor in the accident, didn't brake too hard etc - so surely the statistics don't apply to him?
It's incredibly frustrating to be financially penalised for something which you had no involvement in whatsoever.
Why should you be penalised for living in the wrong postcode or being born in the wrong year? It's unfortunate but that's life, until someone comes up with a more accurate way of assessing risk then were stuck with it.
With the amount of "insurance isn't fair!" posts I'm surprised some ocukers haven't formed thier own insurance company and made millions!
With the amount of "insurance isn't fair!" posts I'm surprised some ocukers haven't formed thier own insurance company and made millions!
It's not illogical though.
Incident A correlates with an increased number of claims. Why does it matter what the incident is?
It's the absolute opposite of illogical, it's completely logical. What you're really complaining about is its TOO logical that its impersonal. But personalising risk assessment would be a huge administrative overhead and would add costs to everyone else's premium, that doesn't sound fair either
Incident A correlates with an increased number of claims. Why does it matter what the incident is?
It's the absolute opposite of illogical, it's completely logical. What you're really complaining about is its TOO logical that its impersonal. But personalising risk assessment would be a huge administrative overhead and would add costs to everyone else's premium, that doesn't sound fair either
The "illogical" comment was mostly in jest, and certainly a matter of opinion 
My only issue is that people such as the OP are penalised by the same statistic that, for example, penalises a person who happens to brake hard and get shunted. They're completely different situations, so you can't apply the same statistic to it.
My only issue is that people such as the OP are penalised by the same statistic that, for example, penalises a person who happens to brake hard and get shunted. They're completely different situations, so you can't apply the same statistic to it.
It's not the same statistic though. If there was a difference between types of third party claims, the companies would take them into account. As I said earlier, accurate assessment of risk is in the insurance companies' interest - both for raising and lowering premiums.
Unfortunately that difference doesn't seem to equate to savings for the consumer though, for the most part (from what I've seen/experienced).
As I am so generous you can even click it
Hint taken
If we wish to discuss it further (I doubt it, I'm all out of effort 
) then we'll take it elsewhere 
I would guess it's all based around Bayesian statistics... It isn't cause and effect, as you say, so it's not even that a person having an accident becomes more likely to have an accident... It's more that the probability of someone having an accident is greater if they are already within a class of people who has had an accident. And that's based purely on known probabilities, not on judging that a person who has had an accident is more likely to have one.
It's difficult to explain this when I haven't studied it in 10 years
Hint taken
Haha, I'm just bored at work. Feel free to continue
Explain why some people have made non-fault claims and not seen an increase in premiums then? (even a reduction in some cases, there was a huge thread on this on PH a while back). Either you are a great risk after a non-fault claim or you aren't.
Because statistics
I really wish you tried to understand what you are writing instead of just repeating statistics as if you understood it because on the face of it you just dont.
I can totally understand what Fox was on about when he said some non fault claims are preventable due to poor decisions. That is quite clear, and therefore it is understandable that these non fault claims increase premiums. People doing stupid avoidable things are more likely to do it again, simple.
If you have a case where you are sitting at a set of lights which are red, you obviously arent allowed to go anywhere and if you are paranoid like me and see a car come up behind I put the brakes on to make sure they see you stopped there. Now if that car somehow smashes into the back of you, that isnt an avoidable accident on your part, it is a chance happening, it could have happened to absoluetly anyone. In that instance it was just pure chance it happened to you or anyone else and in that instance to say you are more likely to have an accident in the future statiistically speaking is pure nonsense and shows a complete lack of understanding of statistics.
If chance happenings increased your chance of things happening again then lottery jackpot winners buying a single ticket would have a greater chance of winning again compared to a non winner which is nonsense. What is more likely is in the instances which Fox came up with where a non fault claim can be avoided, some companies have decided that they are more likely to happen again and as insurance companies dont check things on a case by case basis then they have grouped the whole thing together irrespective if it was an unavoidable non fault accident or not. If that is the case then I understand what they are doing but it isnt just a case of statistics.
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Because mathematics is logical and clear cut, it's how you choose to apportion that data is where the potential flaw is. Now if it is a flaw then fair enough but I don't accept the blanket statistic argument because it hides what is truly happening. Being an engineer I like to try and understand the underlying mechanisms, my wife obviously thinks its because I'm a nerd
Because mathematics is logical and clear cut, it's how you choose to apportion that data is where the potential flaw is. Now if it is a flaw then fair enough but I don't accept the blanket statistic argument because it hides what is truly happening. Being an engineer I like to try and understand the underlying mechanisms, my wife obviously thinks its because I'm a nerd
OK I'm going to try again, I apologise in advance for the long post... Firstly - what credibility do I have to explain this? Not a huge amount, but my now retired father was a senior director at one of the largest financial institutions in the UK and I've discussed this with him before. Also, to me a lot of it seems like common sense, hence the exasperation when people don't seem to get it.
Firstly, the "blanket statistic" you refer to isn't blanket at all. Accident details are shared between insurance companies so different types of third party claims will have a different impact on your premium. It may not be "enough" detail in some people's opinion, but accuracy has to be balanced with efficiency or premiums would increase anyway.
There tend to be 2 arguments about it around here which go around in circles.
1 - It's not fair.
Well that depends on your definition of fair. When this is proclaimed around here, my response is often - how would you do it to make it more fair? This has never been responded to.
Using the numbers to analyse risk is really the fairest way. You could have someone manually looking at a person's claim history and applying opinion to it, but 2 problems with that. Firstly, it would add a significant cost, which would no doubt be reflected in everyone else's premiums. That's not terribly fair to those who haven't claimed! Secondly, it wouldn't be consistent - as soon as you start applying manual intervention or opinion to anything you introduce human error and inconsistency, that's definitely not fair.
Yes, it sucks - I'd never say that someone like the OP "deserves" the increased premiums but that's life. There's a lot in life which isn't fair, unfortunately being fair to everyone is nigh on impossible, especially when "everyone" constitutes a significant portion of the UK population!
You also don't hear people complain when their premiums go down because of statistical factors which don't make sense. OP parks his car on a drive, that may have worked out cheaper than parking in a garage - which to some would logically be a safer place to park. Ultimately with analysing risk for insurance, there doesn't have to be a causation, just a strong correlation. The only exception to this is, recently - gender. There's a huge correlation (and causation!) between gender and risk, but politics got in the way with that one.
Tl;Dr - Life isnt fair, get over it
2 - The companies aren't using proper statistics. It's all a big conspiracy, stick it to the man, rabble rabble rabble!
The actual processes used to calculate risk and subsequently costs are pretty closely guarded and I don't think there's much information in the public domain at all about it. The details would also well beyond my level of understanding, but what I can be sure of is that they do use every bit of information they can to more accurately assess risk.
Some just say they will unfairly load your premiums when you have a third party claim - this is absolutely untrue and might even be illegal. How can I be so sure that this is the case? Well, knowing someone who worked with these things gives me a good amount of confidence for a start.
Also, as you say, there are cases when premiums WONT go up after a third party claim - the only way to explain this is that whatever calculation of risk the insurance company has carried out has shown that individual to be a lower risk. Either that or more likely, other factors lowered the risk and the third party claim had little effect.
Finally, it's common sense - as I said earlier, it's in everyone's interest to use the most accurate information . The insurance companies make money by being accurate - if someone is a risk they need to know so they can apply a high premium to pay for the claims. If someone is a lower risk, for whatever reason, then they need to be able to apply a low premium. This is the bit that some people miss, that insurance is still a competitive market. If you can't be competitive in a market where price is most people's main/only factor when buying then you'll lose business.
If all the insurance companies were loading premiums unfairly for a certain group of people who DIDN'T constitute a higher risk, then it wouldn't be long before someone set up a company who offered that group of people a lower price and made a lot of money themselves.
Tl;Dr - Yes, they are.
I have really no desire to spend my sunday lunch with my dad discussing insurance, but if you have any specific questions I can certainly ask the question when I see him later. But hopefully the above explains it, although I'm full expecting someone to come back with "But it's not fair!!".....at which point I'll probably find the closest brick wall.
Just a couple of questions regarding that last post - Why do you think that the details of how they assess risk are so closely guarded? Surely if, as you say, it's in everyone's interest to make sure they're accurate for both the company's and the publics sake, then publishing them wouldn't do any harm, even if there are only a few people who fully understand them?
Also, what would be the reason for the renewal price of premiums being ridiculously high, only to drop when you question it? If the numbers were accurately calculated in the first place (as it's in our interest after all...) then surely there's no reason for the premiums to be bumped up like that?
Also, what would be the reason for the renewal price of premiums being ridiculously high, only to drop when you question it? If the numbers were accurately calculated in the first place (as it's in our interest after all...) then surely there's no reason for the premiums to be bumped up like that?
The answer to both questions is the fact that insurance is a competitive market. The processes and algorithms are closely guarded because it gives them a competitive edge. If one company's processes are more accurate than another, the other company would certainly want to see them. If they were forced to publish them, it would mean the market stopped being competitive overnight, which isnt in the interests of the consumer at all. We put our faith in the regulatory bodies to ensure these are legal and fair. As I explained though, this aspect of things is almost self regulating
Secondly, this happens with most services which are sold. Think of it as any other product being sold - the companies still have a markup on that which they are able to reduce with negotiation. They may also achieve a reduction by "tweaking" some aspects of the policy - extra features, excesses etc, although they should tell you about this.