Discuss "Car insurance is legalised theft," by @Phaeton

[des8]

This was prompted by a quote from Phaeton re motor insurers "....., the whole motor insurance is a corrupt & vile industry where they can do as they wish, legalised theft, sorry but they are my pet hate, they are worse than debt collectors & parking fines."
This was on another thread, and I did not wish to go "off topic"

How many others agree, and could they post reasoning for condemning the WHOLE of the motor insurance industry in this manner?

As many will know I was involved in insurance in another life, and whilst I agree there are some in the industry (mainly on line brokers whom I would not support), generally I have found insurers to be fair.
I have had disagreements with insurers , but this has been mainly due to the outsourcing to companies who employ people who do not even know how to read an insurance policy.
I did once take on SWIFT on behalf of my daughter, and whilst I was pointing out to them the faults in their online policy wording they actually changed it! (I'd already taken screen shot of original wording).
A lot of problems occur IMO because customers buy on line from the cheapest quote, don't read the full policy wording (as it is too legal just like credit agreements!) and are surprised when making a claim to find they haven't got the cover they thought they were buying. Comprehensive is a bit of a misnomer!

What do others think?

[EXC]

I don't know how relevant this is but here goes.

I'm not the type that pays any interest in my car insurance. I've been with Direct Line for decades and normally don't bother reading the annual renewal notice and quote. However last year for some reason I zeroed in on the breakdown cover cost which was £180 for each of both my vehicles. A quick Google for a quote directly from the same breakdown service supplier for exactly the same service cover for my cars and I could have got it for £60. So based on that it looks like I had been paying Direct Line 3 times as much for decades. Direct Line soon matched the price when I gave them 7 kinds of $hit on the phone.

You could say it's partially my fault for not interrogating quotes which I would accept if I had been paying a bit or even quite a bit more than what I should or needed to but 3 times is taking the Mick.

There than that they've been pretty good and paid up without any questions when I wrote off a milk float I hit on an icy hill one time.

[warwick65]

So much of what is written about insurance companies would be relevant to almost any industry throughout the developed and probably the developing worlds. Business has one motive and that is profit - this profit is not for the benefit of customers or even the employees, it is entirely for the benefit of the owners, who are often faceless cooperate pension funds and investment vehicles.

[Phaeton]

EXC This is exactly part of the issue, they actively try to defraud people, my AUTO renewal has just come through £234, quick cocompare/comparethemeekat same company £185, rang them, they will match it immediately, No they won't, I've gone elsewhere at a slightly higher cost. Why are they allowed to AUTO renew, it should be illegal to do it, or if it should be an opt-in service not an automatic service you can't opt-out of.

I have only had 1 'accident' in 40 years of motoring, reversing into a parking space a car drove behind me I saw him & stopped, he claimed it'd hit his car, I didn't, the front wing, front passenger door & rear passenger door was all caved in. no marked on my vehicle at all. He put a claim in & got £5500, the car was written off £1500 & the £4000 was for injuries & expenses. This was in a car park I was doing less than 1 mile an hour & NEVER touched his car. In the documentation that was sent to me included a medical report where he'd been to the A&E 2 days before having been involved in an accident where a car had reversed into him, sound familiar?

Sorry the motor insurance industry is corrupt, it's a known fact ask Jack Straw, but he can't get any traction in the House of Commons due I suspect to the number of pension schemes that are invested in the industry.

Sorry to rant but it is one of my pet hates, probably my biggest.

[des8]

I don't know how relevant this is but here goes.

I'm not the type that pays any interest in my car insurance. I've been with Direct Line for decades and normally don't bother reading the annual renewal notice and quote. However last year for some reason I zeroed in on the breakdown cover cost which was £180 for each of both my vehicles. A quick Google for a quote directly from the same breakdown service supplier for exactly the same service cover for my cars and I could have got it for £60. So based on that it looks like I had been paying Direct Line 3 times as much for decades. Direct Line soon matched the price when I gave them 7 kinds of $hit on the phone.

You could say it's partially my fault for not interrogating quotes which I would accept if I had been paying a bit or even quite a bit more than what I should or needed to but 3 times is taking the Mick.

There than that they've been pretty good and paid up without any questions when I wrote off a milk float I hit on an icy hill one time.

Your attitude, EXC, is that of the general public... just let insurance roll on as long as the premium hike isn't too much, and generally speaking it is all OK. and you don't feel that you are being ripped off.
Direct Line aren't actually the insurers. They hold a "binding contract" from UK Insurance.
However they do make an "administration charge" for amendments to policy eg £48 for early cancellation, on top of the insurers applying short term rates.
IMO that admin fee is totally outrageous, seeing that whilst they can be charged they have to be reasonable.
Pressing a few buttons in a call centre costs £48 !!!!!!!!!!!!

[Phaeton]

Pressing a few buttons in a call centre costs £48 !!!!!!!!!!!!

In olden days :-) I could understand a charge, as there were documents to update, possibly modify, maybe even notify other insurers, but now, no way, virtually everything is interconnected via databases, as you say £48 for 10, maybe 15 keystrokes is criminal

[des8]

EXC This is exactly part of the issue, they actively try to defraud people, my AUTO renewal has just come through £234, quick cocompare/comparethemeekat same company £185, rang them, they will match it immediately, No they won't, I've gone elsewhere at a slightly higher cost. Why are they allowed to AUTO renew, it should be illegal to do it, or if it should be an opt-in service not an automatic service you can't opt-out of.

I have only had 1 'accident' in 40 years of motoring, reversing into a parking space a car drove behind me I saw him & stopped, he claimed it'd hit his car, I didn't, the front wing, front passenger door & rear passenger door was all caved in. no marked on my vehicle at all. He put a claim in & got £5500, the car was written off £1500 & the £4000 was for injuries & expenses. This was in a car park I was doing less than 1 mile an hour & NEVER touched his car. In the documentation that was sent to me included a medical report where he'd been to the A&E 2 days before having been involved in an accident where a car had reversed into him, sound familiar?

Sorry the motor insurance industry is corrupt, it's a known fact ask Jack Straw, but he can't get any traction in the House of Commons due I suspect to the number of pension schemes that are invested in the industry.

Sorry to rant but it is one of my pet hates, probably my biggest.

Well auto renewal was introduced so that insureds were not caught out by the continuous insurance enforcement regulations.
There should be an option to opt out... did you not see it, or did you not read and understand?

To increase your premium is not defrauding you.
You might think it unfair to offer different premiums through different outlets but it is not uncommon.
Frequently brokers are able to offer insureds premiums lower than those quoted directly from the insurers themselves.
For a variety of reasons a broker could be in a position to discount prices EG rebating some of his commission: support from the insure to increase his written book from a particular source etc.
Commercial reasons giving an apparent discrepancy aren't an indication of a corrupt industry

So your insurers met a claim which you feel was fraudulent.
How does that make the industry corrupt?
Surely it is an example of a member of the public defrauding the insurance company and so driving up every one elses' premiums?

[Phaeton]

Well auto renewal was introduced so that insureds were not caught out by the continuous insurance enforcement regulations.
There should be an option to opt out... did you not see it, or did you not read and understand?

On both existing auto policies the option to NOT auto-renew was not offered, neither was it on the house buildings & contents, however the new auto insurer today it was an Opt-out option which I took.

To increase your premium is not defrauding you.

Grey area/thin line, I believe it is when used in conjunction of auto renewal as above where contacting the insurer drops the premium by 25%

So your insurers met a claim which you feel was fraudulent.

I know was fraudulent, any rational person would know it was fraudulent

Surely it is an example of a member of the public defrauding the insurance company and so driving up every one elses' premiums?

Precisely they were negligent if they did their job properly this person would have been prosecuted.

[Onestepatatime]

Insurance is no more than gambling on stocks and shares, where else do you pay for something just in case you need it?
you wouldn't go into an Electrcial shop and pay monthly or in advance for a TV just incase your existing one packs up.
The reality is this the majority of people will never claim on their insurance thus we just give money away freely, there is never a 'o you've paid us for the last five years without needing our services so here's a comlpimentary year free' gesture.
the truth of insurance is that its not there for you but for the few that claim against you. I currently have an outstanding claim whereby a vehicle two in front was passing an entrance to a lay you in a hire van when she suddenly decided to slam the breaks on to enter the lay by to let her pooch out to relieve itself. I couldn't see her only the larger fan in front of me, now I was actually at a safe driving distance, however as he had no weight in his van and I was fully laden I hit the rear of him as he took his foot off the brake and started moving again, a moment earlier and I'd have missed him altogether. Now my insurance who I pay for their service has basically implied that I'm at fault as I was at the rear of the queue, how an accident starts at the rear of a queue is quite beyond me in this case as we were all moving? This is despite the police reporting this lady as a dangerous driver, the hire company does not permit animals in the passenger area of the vehicle and the guy I hit saying I had no chance.
Oh and to top it off the driver I hit has now put in a personal injury claim, I wonder who put that idea to him!!.
the damage to his vehicle was a slightly buckled bumper, bearing in mind he had a tow bar that did more damage to my vehicle. Yet somehow it was all my fault?
Id sooner not bother participating in the whole insurance scam, I'm not a gambling man don't do any other form of gambling but am required by law to participate in this scam, unless of course I come into a significant sum of money whereby I'm no longer required by law to actually have vehicle insurance.
Makes me sick this control of the masses approach.

Rant over!

[warwick65]

I am sorry to say but this is the capitalist economy we live in and if you voted for ANY of the mainstream parties - this is what you voted for

The all work on free markets , some are more laissez faire than others but nonetheless we sit there and vote and complain at the anti capitalism/globalisation marches when we see them on the TV but we are the turkeys who ticked Christmas on the ballot box.

Apoligies if anyone actually voted for a true socialist party or maybe even a communist one or, if the option had been available voted non of the above. Personally I vote the way I think my vote will best minimise what I am complaining about

[des8]

Insurance is no more than gambling on stocks and shares, where else do you pay for something just in case you need it?
Gambling is taking a risk in the hope of future gain .... Insurance is a form of management of risk of contingent uncertain loss.
Totally different animals!
you wouldn't go into an Electrcial shop and pay monthly or in advance for a TV just in case your existing one packs up.
The reality is this the majority of people will never claim on their insurance thus we just give money away freely, there is never a 'o you've paid us for the last five years without needing our services so here's a comlpimentary year free' gesture. Some insurers (eg Eagle Star) used to give householders a free fifth year if claim free. Don't know if any still do, but I think some do give NCB on household policies
the truth of insurance is that its not there for you but for the few that claim against you. I currently have an outstanding claim whereby a vehicle two in front was passing an entrance to a lay you in a hire van when she suddenly decided to slam the breaks on to enter the lay by to let her pooch out to relieve itself. I couldn't see her only the larger fan in front of me, now I was actually at a safe driving distance, however as he had no weight in his van and I was fully laden I hit the rear of him as he took his foot off the brake and started moving again, a moment earlier and I'd have missed him altogether. Now my insurance who I pay for their service has basically implied that I'm at fault as I was at the rear of the queue, how an accident starts at the rear of a queue is quite beyond me in this case as we were all moving? This is despite the police reporting this lady as a dangerous driver, the hire company does not permit animals in the passenger area of the vehicle and the guy I hit saying I had no chance.
Sorry, but if you can't stop in the space in front of you, you are travelling too fast or too close or not paying attention.
It is like peeps complaining when they get caught stopping in a yellow box because car in front has stopped unexpectedly...do not enter box until exit is clear
Oh and to top it off the driver I hit has now put in a personal injury claim, I wonder who put that idea to him!!.
the damage to his vehicle was a slightly buckled bumper, bearing in mind he had a tow bar that did more damage to my vehicle. Yet somehow it was all my fault?
Lucky you were insured then!!
Id sooner not bother participating in the whole insurance scam, I'm not a gambling man don't do any other form of gambling but am required by law to participate in this scam, unless of course I come into a significant sum of money whereby I'm no longer required by law to actually have vehicle insurance.
Of course if you find the £500,000 (?I think) you still face unlimited third party liability, and could wish that you had effected insurance in the event of a claim!!
Makes me sick this control of the masses approach.

Rant over!

So you don't "believe " in insurance.
By that I suppose you think that if you inadvertently cause harm to another person or their possessions you have no duty to make recompense, or possibly you have unlimited funds to do so !
Employers are required by law to carry "employers liability " insurance.
Presumably you would dispense with that and to hell with the employees.

The spreading of risk by different forms of insurance has existed for over 4000 years, and whilst like any business it attracts rip off merchants, that doesn't mean the industry is inherently corrupt. It has enabled business to develop, and contributed greatly to our safety (eg development of fire brigades)

[des8]

On both existing auto policies the option to NOT auto-renew was not offered, neither was it on the house buildings & contents, however the new auto insurer today it was an Opt-out option which I took.
I agree that some insurers are unclear, however if your policy is automatically renewed you do have the right to cancel without penalty within 14 days
Grey area/thin line, I believe it is when used in conjunction of auto renewal as above where contacting the insurer drops the premium by 25%
So it pays to check your post!
I know was fraudulent, any rational person would know it was fraudulent
Precisely they were negligent if they did their job properly this person would have been prosecuted.
You may feel they were negligent, but that is not corrupt nor "legalised theft" by the insurer (which was your original charge)
It is not for the insurers to initiate private prosecutions for fraud, although they do co operate with the authorities
The industry funds the Insurance Fraud Bureau (IFB), a not-for-profit organisation specifically focused on the detection and prevention of organised fraud;
the Insurance Fraud Enforcement Department (IFED), a specialist police unit dedicated to prosecuting insurance fraudsters;
the Insurance Fraud Register (IFR), an industry-wide database of known insurance fraudsters;
the MyLicence data sharing initiative with Government which will help to tackle application fraud in motor insurance.

Insurers are commercial entities.
When you insure with a company you subrogate your rights to them to deal with your problem as they see fit.
If they decide to accept a claim which you feel is fraudulent, you need to prove it to them first,
They will then take a commercial decision about it.. it could be cheaper to accept rather than dispute the claim.
This doesn't mean they are corrupt.

But of course one will get the fly boys trying to get in on the game.
There are still "brokers" producing false documentation and pocketing the takings, but I think that the days of Savundra and FAM are long past

[Onestepatatime]

Well I just guess it comes down to beliefs Des, you clearly don't believe in responsibility but choose to hide behind someone else's alleged protection. I never denied hitting the guys vehicle and accept my part and responsibility in doing so, what aggrieved me is the fact that the lady was never spoken too despite the police accepting dangerous driving on her part! Where's the responsibility in that by my insurer, no take the easy way out because they are not interested in the correct determination of responsibility as they may cost too much to achieve. Yes I could have easily afforded the repair to his vehicle and would have probably carried out the repair for him seeing as he was known to me through a family member, however as people can't take responsibility and he had a cretin talk him into a false claim for their own benefit then why should I take responsibity for his false actiions.
oh and before you go off on what if someone hit me, well let me tell you I've been there and it was completely not my fault, a vehicle turned straight across my path on a straight road, but was I restored to the position I was in prior to the accident, NO, why because of the very same corruptness that is bred from the insurance industry, yes I was left with £100k of debt from it, so forgive me if I am of the belief that insurance is no more than a scam.
I even had the defendants solicitor apologise to me after the case was closed and tell me that he was just doing his job.

having now just read your response to Phateon post, it is clear that you don't have a problem with the commercial gain above all else. Perhaps you haven't been wronged by these entities, perhaps you chase financial gain above all else? I'd sooner see that the 'right' thing is done by people rather than what is cheapest or most financially viable. Sadly much of the world is dominated by those with your view perhaps that's why we have made such a mess of this world. Perhaps that's why when executives take obscene payments then fail the business without consideration to those that have built the business, the world accepts it and does nothing to change it. That's responsible!

[EXC]

I am sorry to say but this is the capitalist economy we live in and if you voted for ANY of the mainstream parties - this is what you voted for

The all work on free markets , some are more laissez faire than others but nonetheless we sit there and vote and complain at the anti capitalism/globalisation marches when we see them on the TV but we are the turkeys who ticked Christmas on the ballot box.

Apoligies if anyone actually voted for a true socialist party or maybe even a communist one or, if the option had been available voted non of the above. Personally I vote the way I think my vote will best minimise what I am complaining about

I'm not quite sure what you're saying there Comrade.

If you're saying that communism is the answer to the excesses of the car insurance market you might have a point given that private car ownership is unachievable for most communist citizens.

[Phaeton]

des8 We can agree to disagree on this one, but from my side of the fence, you are clearly sat on the other side (I even suspect within the industry or have a vested interest) As consumer of the product (which I am legally bound to use), my view still is that the whole of the auto insurance industry is corrupt, starting at the top & coming down, I'm sure there are some very good people employed, some with morals & conscience, but the whole industry needs a reform.

Onestepatatime Sorry but I'm with des8 on this one, if you hit the vehicle in front no matter what they did it's your fault, annoying I know, but you have to accept that. The only time when I would argue it is when on a dual carriageway/motorway when somebody changes lanes into your safety gap & you haven't had time to get the gap open up again.