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Insurance Charges for Changing an Address

Last post Mon, Jan 21 2013, 3:03 PM by isis. 15 replies.
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  •  Mon, Jan 21 2013, 3:03 PM

    Re: Insurance Charges for Changing an Address

    Hi Coyote,

    Dont suppose you'd be willing to share your study? Sounds really interesting...

    Isis

    • Post Points: 5
  •  Wed, Jan 16 2013, 8:06 PM

    Re: Insurance Charges for Changing an Address

    Santabob:If my car is legally parked outside my house and you collide with it - this will put my premium up. Why? If I am stationary at a red light and you run into the rear of my car then my premium will go up. Why? If I am involved in a minor collision in a car park and phone my insurer for advice, but there is no claim from either side (we both agree to pay for our own repair), then my premium goes up. Why?

    "If my car is legally parked outside my house and you collide with it - this will put my premium up. Why?"

    Because your next door neighbour, another contributor to the insurance pool who was also legally parked, did not have a car collide into him.

    "If I am stationary at a red light and you run into the rear of my car then my premium will go up. Why?"

    Because the person in the car stationary in the opposite lane of traffic at a red light did not have someone run into the rear of their car. This person also being another contributor to the insurance pool.

    "If I am involved in a minor collision in a car park and phone my insurer for advice, but there is no claim from either side (we both agree to pay for our own repair), then my premium goes up. Why?"

    Because the other person parked in the same car park (another contributor to the insurance pool) was not involved in a minor collision.

    "No accidents, incidents, claims, thefts or losses, irrespective of fault, within the last 5 years" = less risk.

    In situations like these examples, and with motor insurance generally, you will always get a better price elsewhere. I think I pay circa £650pa although I did get a quote from Hastings on this site and other aggregators around £380 but then I didn't fancy putting my money down the drain.

    Premiums for motor insurance adjust/shift and increase daily, as does Underwriting criteria. It may be part of one insurer's criteria that they load 1% for any incident where another insurer may be 50% - it's up to them and how they want to balance their book of business. This is why you will get a huge difference in premiums quoted depending on insurer - some may like certain aspects of the risk, some may look at it differently. I was being quoted from £380 all the way up to £2,900. It doesn't mean that the one quoting £2,900 is a 'rip-off' - they might quote £380 for someone else who fits their target Underwriting model.

    • Post Points: 5
  •  Wed, Jan 16 2013, 12:17 AM

    Re: Insurance Charges for Changing an Address

    Hi Santabob,

    Please do tell how they "make money" from repairers and paint distributors considering a claim would have to be brought forward in order for the repairer or paint distributor to be given the job? I can't make sense of that whatsoever. Sure, they can make a saving but they most certainly do not make money.

    RE Point 3 "system of increasing premium". Irrespective of it being an incident, a fault claim or a non fault claim within the pool of insured parties that person reporting the incident is a higher risk than those who have reported none. A non fault claim will still increase a premium (by not applying a complete claim-free discount off the base premium) however obviously not as much as a fault claim. Even if you are at fault with protected no claims the premium will rise but again not as much as what would have been in absence of that protection.


    The way it works is that the people involved make payments to the insurers. This is effective with no fault claims where the costs are borne by the 3rd party.

    If my car is legally parked outside my house and you collide with it - this will put my premium up. Why? If I am stationary at a red light and you run into the rear of my car then my premium will go up. Why? If I am involved in a minor collision in a car park and phone my insurer for advice, but there is no claim from either side (we both agree to pay for our own repair), then my premium goes up. Why?
    • Post Points: 20
  •  Tue, Jan 15 2013, 10:18 PM

    Re: Insurance Charges for Changing an Address

    Santabob:Insurers keep up this mantra of it being unprofitable but they continue to make profits. It may be the case that the total premiums collected are lower than the total of claims paid out - but they have many other ways of making money. Like deals with repairers, paint distributors etc.

    The problem seems to be the same as the low-cost airlines. They have to quote low basic premiums to get the business from comparison sites, but they don't make a profit on that, so they take every opportunity to charge for so called extras. Like change of address or some other detail.

    They also have a system of increasing the premium for any motorist who even reports an incident. It doesn't matter if there is a claim, or who is at fault - up goes your premium. It's compulsory, and I wouldn't be without it even if it weren't, but it is very far from being transparent.


    Hi Santabob,

    Please do tell how they "make money" from repairers and paint distributors considering a claim would have to be brought forward in order for the repairer or paint distributor to be given the job? I can't make sense of that whatsoever. Sure, they can make a saving but they most certainly do not make money.

    RE Point 3 "system of increasing premium". Irrespective of it being an incident, a fault claim or a non fault claim within the pool of insured parties that person reporting the incident is a higher risk than those who have reported none. A non fault claim will still increase a premium (by not applying a complete claim-free discount off the base premium) however obviously not as much as a fault claim. Even if you are at fault with protected no claims the premium will rise but again not as much as what would have been in absence of that protection.
    • Post Points: 20
  •  Tue, Jan 15 2013, 10:11 PM

    Re: Insurance Charges for Changing an Address

    maxsteam:
    Coyote:

    Unfortunately, believe it or not, we all pay way way under what we should for motor insurance

    Rofl!

    I paid £50 per year insurance to drive a 2 litre Mercedes in the Middle East, where the roads are far far more dangerous than here. In New Zealand, the legal minimum insurance is included with everyone's tax disc which costs £150.

    The UK insurance system is only so expensive because it is so corrupt.



    Hi Maxsteam,

    Yes I remember you saying years ago. I think my answer was the same, that being this is the UK not the Middle East, nor New Zealand.

    The UK insurance system is so expensive because people do not accept responsibility for their own actions and fail to see the bigger picture and consequences. The system is not corrupt, people are.
    • Post Points: 5
  •  Mon, Jan 14 2013, 8:06 PM

    Re: Insurance Charges for Changing an Address

    Insurers keep up this mantra of it being unprofitable but they continue to make profits. It may be the case that the total premiums collected are lower than the total of claims paid out - but they have many other ways of making money. Like deals with repairers, paint distributors etc.

    The problem seems to be the same as the low-cost airlines. They have to quote low basic premiums to get the business from comparison sites, but they don't make a profit on that, so they take every opportunity to charge for so called extras. Like change of address or some other detail.

    They also have a system of increasing the premium for any motorist who even reports an incident. It doesn't matter if there is a claim, or who is at fault - up goes your premium. It's compulsory, and I wouldn't be without it even if it weren't, but it is very far from being transparent.
    • Post Points: 20
  •  Mon, Jan 14 2013, 12:19 AM

    Re: Insurance Charges for Changing an Address

    Coyote:

    Unfortunately, believe it or not, we all pay way way under what we should for motor insurance

    Rofl!

    I paid £50 per year insurance to drive a 2 litre Mercedes in the Middle East, where the roads are far far more dangerous than here. In New Zealand, the legal minimum insurance is included with everyone's tax disc which costs £150.

    The UK insurance system is only so expensive because it is so corrupt.

    • Post Points: 35
  •  Sun, Jan 13 2013, 7:30 PM

    Re: Insurance Charges for Changing an Address

    Hi guys,

    Thought I would chip in here after doing a recent (and very in-depth) case study on this myself for work-related purposes.

    Whilst I appreciate the perception of all this, especially with the seemingly identified synergies between bank:insurance, the bottom line is there isn't enough money to sustain profitability without these administration charges - especially with motor insurance which remains unprofitable in it's entirety. We'll use motor insurance in this discussion in the OP's interest.

    Most people will associate admin fee with just the cost of paper, postage and general administration. This does mount up but this really has very little to do with it in the main. For example I recently changed my address and had to pay £25.00 "Administration Fee" - despite my policy documentation being accessed online - they do not send documents by post unless I pay a further £25.00! Naturally I opted to stay electronic. But the point here is that along with everyone else, broker's and insurer's other administration costs are rising at an alarming rate. Yes paper and yes postage but also system processes, maintenance and other overheads falling under the same heading of "Administration" so I would have to politely refute comments such as "it doesn't take any time to change an address", "it doesn't cost anything for them to do it" (it does!), although, like I said, on the face of it I appreciate how it may look.

    Now these charges we are talking about are most likely broker-imposed, rather than directly from the insurer. A broker is a distribution channel for insurers, with the other option being direct. Unfortunately, believe it or not, we all pay way way under what we should for motor insurance given the pool available - the whys and wherefores is another discussion entirely. But this means less commission for the broker. For motor insurance the commission is anywhere from 5%-12.5% (with some variation). As the premiums are so low, 10% of £300 is vastly under 10% of £1,000 (e.g.).

    Now we have already seen a great number of smaller brokerages closing the doors or being acquired by the larger nationals in it for the acquisitions, so these charges are important for sustainability. I can assure you that no growth is made by applying a fee. The smaller brokers go, the larger ones take over. The larger ones demand more from the insurers, the premiums need to be adjusted taking this into account. The insurers decide it's becoming cumbersome so they decide to distribute directly to the customer - so they now need a (very large) marketing budget, so it negates itself.

    There are so many more technical elements I could list here from my analysis and report but it would become even more boring than as above so I will spare you!

    So, in essence, whether a fee is charged or wrapped up in the premium, you would be paying roughly the same by the end of it. What we have to keep in mind here is that insurance is a business, not a charity. Without it the UK would be in a far dire economic state than is current, especially as they hold their own when the banks failed miserably, and also tarnished the insurance industry with their unqualified distribution of insurance causing PPI claims on a mass scale. I digress, and yet another subject entirely.

    Anyway, I hope this goes some way into helping understand.

    • Post Points: 35
  •  Fri, Jan 11 2013, 2:23 AM

    Re: Insurance Charges for Changing an Address

    BREWERDAVE1:they presumably reassess the premium for the risk at a different post code??

    Moat insurers levy a charge for any change. It varies between companies from £0 (?) up to £50 just for making a change of address/job/marital status etc., if there is also a change in risk, then that will add another charge. Charging extra because of extra risk can easily be justified but to justify charging extra because of nominal changes in details takes a little imagination. Maybe they look at the overheads of running a flashy office and providing company cars.

    • Post Points: 5
  •  Wed, Jan 09 2013, 1:42 PM

    Re: Insurance Charges for Changing an Address

    sugna - We have moved to a less risky area yet there was no reference to a possible decrease in premium.


    Just out of interest why not run a online quote with this company providing the exact same details apart from replacing the old with your new postcode?

    This could highlight any decrease in premium and provide you with the ammunition required to demand a partial refund should the quote at the new postcode be less.

    A bit of revenge !

    • Post Points: 5
  •  Wed, Jan 09 2013, 12:08 PM

    Re: Insurance Charges for Changing an Address

    The charges quoted by the insurance companies is purely an administration charge to change the address - NOT any increase in premium. In fact, we have moved to a less risky area yet there was no reference to a possible decrease in premium.
    • Post Points: 20
  •  Wed, Jan 09 2013, 11:24 AM

    Re: Insurance Charges for Changing an Address

    Sorry - I obviously wasn't clear - eg did the £49 include an increase in premium for the new address as well as "admin" charges? Or did you pay extra premium separately??
    • Post Points: 20
  •  Wed, Jan 09 2013, 11:09 AM

    Re: Insurance Charges for Changing an Address

    And how long do you think this takes with a fully automated computerised system? Certainly NOT £49 worth of time! If we simply accept these outrageous charges then nothing will be done about them - let them know it is a competitive world out there and you will NOT renew with them.
    • Post Points: 20
  •  Wed, Jan 09 2013, 11:00 AM

    Re: Insurance Charges for Changing an Address

    But this charge is not just for the address change - they presumably reassess the premium for the risk at a different post code??
    • Post Points: 35
  •  Tue, Jan 08 2013, 10:50 PM

    Re: Insurance Charges for Changing an Address

    sugna:

    I have made a note NOT to renew with these companies next time around.

    Most companies play the same game but, as you say, charges vary. All insurers should tell you the amount that they charge for administrative changes before you buy though.

    • Post Points: 20
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