It’s all right for some …
James Westacott attacks his favourite whipping boy
With advance apologies to those who inhabit it – indeed work hard and have done well for themselves – I hate the insurance industry.
As far as I am concerned, the world of insurance is money for old rope. A comfortable modern refuge of a career for those who, not quite intelligent enough to make it in ‘real’ professions, e.g. law, accountancy, architecture, engineering and medicine, belong – or aspire to – a similar rung of the class ladder as those who are.
The industry is, of course, entirely built upon an actuarial formula whereby the premiums raked from punters in will always be able to cover any insurance claims made – and then, hopefully, leave a suitably large sum for those involved to take as salary in order to enjoy a very-nice-if-you-can-get-it lifestyle.
However, it doesn’t quite end there. Factored into the equation are two things.
Firstly, there is an ‘insurance policy’ of the insurers’ own, i.e. that when there are a high number of claims – justified or not – and/or some unprecedented disaster that produces an unexpected rush of them, the insurers cite it as a unanswerable reason as to why everybody’s premiums, even those whose policies weren’t involved and haven’t claimed, need to rise significantly further.
Secondly, of course, there is the ‘hidden’ X-factor in said formula – the one which holds, and is proved time and again to work, that in any given year the large majority of those holding insurance policies will not make claims upon them, even if they have qualifying cause.
Let us leave aside for the moment the other phenomenon of the insurance industry, i.e its never-ending determination to try and sell us new types of insurances, not least those covering eventualities that we customers had never contemplated occurring and/or didn’t know that it was ever possible might occur.
I’ll give you an example of one such.
About three years ago, after seventeen years of paying for the gas supply at my current abode, suddenly the relevant utility supplier tried to sell me insurance to cover the pipes leading from the mains in the road into my building which, apparently, they had just discovered were my responsibility, not theirs.
Here’s another true incident.
Last week, my brother was going through our father’s outgoings and found a bill he had just paid for nearly £4,000 for his household insurance premium, which amount my brother regarded as wildly excessive.
Pressed on the subject, my father saw nothing untoward in the amount – in his view it was “about right”. My brother took issue, not least on the basis that two of the downstairs rooms in the house were currently suffering from the considerable effects of flood damage occurring during the poor weather of the past winter, and on which my father had no intention to make an insurance claim. My brother pointed out that, having lived in the house for 37 years – and paying an average of say £2,000 per annum over the period to the same insurer throughout – on the face of it, my father had shelled out approximately £74,000 without ever having made a single claim against said insurance policy.
Try multiplying that by say a million policyholders who have done exactly the same – it’s nice money if you can get it!
Here’s another, and personal, case in point.
I have a slight history with motor vehicle speeding fines, which – stupidly, my kids say – through bitter experience I have come to regard as little more than an occupational hazard of using Britain’s roads.
Let me be honest. I acknowledge that speed limits exist and that a sure-fire way of avoiding speeding fines is simply not to speed. However, I regard myself as an average-to-good driver and as someone who always drives safely, given the prevailing road and traffic conditions. For instance, I always leave a large-sized ‘stopping distance’ between me and the car in front – only to watch endless cars then zooming past and then nip into my lane in front of me, thereby requiring me to back off in order to restore that same ‘safe distance’.
My downfall is situations such as a quiet Sunday morning when there is little or no traffic.
If I feel totally content and safe driving at 35mph along a dual carriageway road, some quarter of a mile behind the next car in front, which is apparently travelling at a similar speed, that is what I tend to do. Then I find myself getting ‘done’ for exceeding the 30mph speed limit relevant to that stretch of road. It’s very frustrating.
Especially when my son demonstrates to me his own method of avoiding speeding fines, as he did four years ago. This amounts to him driving at whatever speed takes his fancy (e.g. 20mph over any prevailing limit) and simply slowing down to the necessary speed when going past a speed camera, the location of which, of course, he has made a point of identifying in advance.
To my mind, de facto, my son is a far more dangerous driver than I am, despite the fact he has never had a speeding conviction whereas I collect armfuls of them.
In any event, as a result of gaining 12 speeding points – all of them for what I regard as petty amounts over prevailing speed limits – four years ago I received a 6 months ‘totting up’ driving ban.
Afterwards, my then insurance company increased my car insurance premium from just over £400 per annum to a new figure of about £1,800.
It has subsequently gone down, progressively, to the point where – as it happens, yesterday – I renewed my insurance for yet another year at a cost of £1,463.
This, I repeat, is for a driver (me) who never drives excessively fast, but who merely has a problem keeping to 30mph or 40mph limits in vaguely built-up areas.
Worse, a week ago, I received a junk mail leaflet from a famous insurance company aimed specifically at the Over-50s, who had somehow found out that my motor insurance was coming up for renewal.
They invited me to obtain a quote, promising ‘we can insure you for as little as £113’. I therefore duly applied for an online quotation from them, simply to establish whether they could accommodate me at a premium less than £1,400.
However, upon me pressing ‘Send’, it took less than a minute for them to reply with a standard phrase to the effect that ‘due to some of the information you have supplied [by which I assume they were referring to my 6 months ban], I am afraid we cannot offer you driving insurance.’
I have two points to make here.
Firstly, if said ‘Over-50s’ insurance organisation has the wherewithal to identify that my motor insurance is coming up for renewal, I cannot believe that they do not also have the capacity to also check and establish whether or not I have any motoring convictions on my record.
In which case, why are they bothering to waste their time – and more important, mine – sending me a flyer offering to insure me at all?
Secondly, I object to the double-jeopardy element of the situation.
Being caught, convicted, fined and given points on my licence – and, ultimately, a 6 months driving ban – is bad enough as a punishment. But for the same incident(s) to also give motor insurance companies the excuse to lift my premiums by over four times seems unreasonable to the point of absurdity.
I’m still the same, ‘safe’ (in my view) driver that I always was, after all. Plus I haven’t made a motor insurance claim since some idiot came out of a side-road and hit my beaten-up old Mini when I was in Leicester in 1973. In fact, I probably drive slower and more carefully now than I did ten years ago. Not that this seems to count for anything.
The answer is far more likely to lie in the laziness and profit motive of insurers generally.
Any excuse – e.g. the neighbourhood you live in, or whether you park on the road or instead in a security-patrolled car park – gives them an opportunity to ‘decide’ that you are a greater risk than the average motorist.
And therefore to up your premiums, ultimately so that they can continue to take their privately-educated families on more luxurious holidays in more exotic locations … and then get pissed at their leisure in their executive boxes at Henley, Cheltenham and Lords.