Insurance is illogical and, as a poster above said, a scam in many cases.
I agree, Its a business where no one but the underwriters understands it, and if you try to push the insurer by asking logical questions they just tell you its a complicated algorithm of factors - because those working for the businesses don't understand it either.
From my perspective and assuming you make no claim in the insurance period they get paid for doing nothing at all. - You call them, will you insure my "whatever it is" - they ask lots of questions and say "Yea, OK, give us £xxx" - You go online, download and print your own documents and that's it. They don't have anything to pay out up front - which begs the question - why do they charge you more for paying by instalments? - where are their added costs?
If mid year some details change and you call them then the less than UK minimum paid call centre staff (earning the equivalent of £5 per month) in a foreign land access the account and edit the details - a minutes work and a £25 admin fee.
Come renewal they add a bit to the previous years premium on the basis they have done it for so many years that we all expect it - and they don't want to disappoint. However, If you call them and intimate you may change insurer they can immediately knock a bit off - or match some one else's quote - so do they anticipate challenges and just add a bit to the premium to see if they can get away with it?
Risk - They claim to assess risk based on so many factors none of them actually list all the criteria they use. If you have a no fault accident - someone else bashes your car in a car park - you are not in your car at the time, - even though you were not a factor in the incident the underwriters raise your personal risk which in turn raises your next renewal premium. They all brag that if your hit by an uninsured driver, or the victim of damage to your vehicle and you are not to blame for the accident, (This includes those instances where the other driver accepts full responsibility and their insurer covers all costs) that your no claims discount isn't affected - which is true, but they are playing semantics - what they don't say is they will raise your premium and apply an unchanged NCD to that premium - the result is your still paying more. Now if you try to ascertain from them a figure that indicates how much the no blame incident has added to your premium - they wont tell you, and go into their schpeel about all the factors used in calculating risk - and that insurance usually does rise each year, or its the underwriters decision and they don't indicate how they arrived at the figure quoted. In short they do everything to evade answering a simple question. Insurance is big business and everything is calculated by a computer program that someone wrote - so they know exactly how much is added to a premium and for every single factor. The reason they wont declare the information is because if they told you your no fault incident has added £30 annually to your premium for three years - if you have established who the at fault person was you could add that figure to your claim and be reimbursed - and they don't want you to be able to do that. The law is clear - If a person suffers a tort (Something wasn't done that should have been done - or - something was done that shouldn't have been done) then you have a negligence case, and if you suffer "damages" (A financial cost of 1p or more) it is claimable - so in effect the insurance industry is preventing people from exercising their rights - which is illegal.
Talking of legality - We have an Equal opportunities act with a list of protected characteristics that makes it unlawful to discriminate or penalise people for any of those characteristics - so Age, Sex, sexual orientation, marital status, ethnicity, race - there is a big list, but the insurance industry use protected characteristic data to calculate risk.
The industry has always told people premiums rise as claims increase - or at least the costs of claims increase - and I get that, but, until parliament outlawed insurers selling claims data to law firms (which resulted in the ambulance chasers phone calls and inflated the costs of claims) they were happy selling that data - and they made a lot of money from it. One really big and well known company made £18 million in a year from selling that list. When the law stopped that practice, the insurance companies simply bought law firms out and continued that practice but were compliant with the law because the law firm was now internal to the company and they are allowed to share all data within the organisation.
