When purchasing a car insurance policy, it appears perfectly legitimate that you could be charged a greater amount if you were involved in a crash recently where the blame lay with you, or you resided in an area where car theft was the norm. However, how insurers price risk in the UK is so intellectual it considers all kinds of other factors that are arguably not very reasonable on the consumer.
Being involved in an accident where the fault was the other drivers may still see your premiums regardless with some insurers, where the justification for the increase is based on the statistics. Seemingly, those involved in car accidents – even when not their fault – have a greater chance of becoming involved in suture accidents. Clearly, though, anybody who has had an accident which was not their fault feels upset to notice their own insurance premiums rise in the subsequent year. However, this occurs all the time.
Equally, scratching the side of your car, and then ringing your insurer to make clear your excess – can also count against you, despite making the decision not to claim. Insurance companies have the belief that a motorist, who scratches their vehicle, has a greater chance of causing more damage to their car in a more grievous incident.
Regardless of if you made a claim on your policy – it is the intricacies of the incident which interests your insurer. Even worse, not openly explaining to your insurer about an incident of that nature – a note may be added to the Claims & Underwriting Exchange database, which will say you hid information – a black mark on your name that can drastically raise the expense of insurance in future years.
Another way in which insurance firms calculate prices is determined by what you do or do not do for a living. Although it appears appropriate for insurers to provide you a higher premium if your work involves driving every day, what is the relevance in someone’s work if they go to the office by public transport? Also why is it that a person who describes themselves as unemployed compared to a homemaker be charged greater for their insurance?
The statistics are always the justification for such price differentials. However, as a community should a debate not begin about the information that is and isn’t fair to use by insurers.
A debate is currently in progress within the life insurance industry on whether insurers may use the outcomes of genetic testing to fix premiums. At the moment, there is unanimous support that the outcomes of estimative genetic tests can’t be considered on any policies worth less than £500,000. Beyond that, insurance firms can only request that you reveal outcomes of estimative genetics test if you have taken one for Huntingdon’s disease (as there is a high chance of this being true).
With a debate ensuring on genetics, should there also not be one for the usage of other pieces of information? A couple of years ago, the EU pressured UK insurers to halt considering gender when calculating the cost of insurance. This appeared a weird decision as there are much defined lines between the frequency and expense of car insurance claims between genders. However, this has been pressured on the market now, it is time to observe the other information used.
A drastic solution would be to alter our insurance structure and make it resemble on that operates in the majority of European nations – whereby the vehicle, as opposed to the person, is insured. Insurance firms feel this will make cover for everyone dearer – and that’s probably right. However, it is time an investigation was made and the evidence was clear for all to see.
Up to the point a transparent insurance system is in place, where the consumer has a clear understanding of the way in which their premiums are set, we will continue to have people withholding information, and will never be able to rebuild the trust between the customer and insurer that has been missing so severely in the modern day.
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