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Crazy Car Insurance Prices! Why?

A Chinese friend who is living in Ireland for many years never had a drivers licence here, but this year he has decided that now is the time to tackle it. His daughter is getting to the age where he can’t pack her on the back of his bike to bring her to school and a “taxi driver” is needed. ;-)

He studied HARD, passed his theory test and got his provisional license. He found a small car that suited him, I think it is a Ford Fiesta and then he embarked on finding an affordable insurance.

He was shocked! The first insurance company quoted him a price close to EUR 5,000! :-O He rang lots more and was constantly told that his insurance premium was so high because he didn’t have any experience. He understands that, but unless the companies allow him to drive (and an somewhat affordable insurance is needed for that) he won’t be able to improve. Tricky situation! In the end he found an insurance that “only” wanted EUR 3,500 and he went for it. So from now on, he will be working close to two months every year, just to pay the insurance. He can’t understand that.

During the week something happened that will help him to understand a little bit better: A passenger in a car got severely injured and sued the driver who drove the car she was in. The case was settled for EUR 5.75 million and THAT is one of the reasons why the insurance premiums are so high.

Unfortunately this case is not one of these “crazy settlement” cases and I say “unfortunately” because it is easier to get angry about a case where someone gets a scratch and walks away with hundreds of thousands. This case is different!

We don’t know why the woman got into the van, but it seems that there is a high probability that she knew that the driver was drunk (three times over the limit!!!) and despite that she most likely didn’t wear a seatbelt. Because of these two things the settlement was a LOT lower (about half) than it could have been otherwise. But the seriously sad thing is that since the accident (3 years ago) the woman is in a vegetative state and is still in hospital.

So the cost the insurance will have to pay are HUGE and I assume that the insurance will have to pay everything even if they might be able to claim some¬† small amount back from the driver, but he won’t have nearly 6mio in his back pocket, so they will only get a fraction back.

On one hand we can get angry about such a crazily high payment that ultimately has to be paid by all other insured drivers through their insurance premiums. On the other hand we can certainly understand that the woman is NOT in a situation where the insurance money is a nice windfall. The money will be used to modify her home so that she can leave the hospital and then will be needed to care for her for the rest of her life. Without a doubt she and her family would prefer a situation where she wouldn’t need that money. So we can see that sometimes these crazily high premiums are fully understandable, but nevertheless they need to be paid and that is ONE reason for what makes the premiums so high.

There is another reason and that is greed or maybe even lies by the insurances. It seems to be certain (and early morning raids have taken place to secure evidence) that the insurances are paying out LESS money for claims than in previous years, but they still claim that the claims grew.

Car Insurance Madness in Ireland! Are they all incompetent?

I needed to renew my car insurance and this is always a good bit of work. Since I made some significant savings a few years ago, I always compare as many as possible insurances every year to see if there is a better offer somewhere.

Last year I didn’t change the insurer, but this year it went a little different. My car is a Mazda with 1.8l and it is 9 years old. I have a full no claims bonus and have my drivers license since I was 18 so for quite a long time. I also am driving in Ireland for many many years, BUT I still have a German drivers license and annoyingly I was caught in last May speeding! Yes, I did drive 6km (!!) faster than allowed and got 3 very very annoying penalty points.

This is the framework and the points and the German license do make things a little less smooth.

The saga started with AIG (last year’s insurer sending me a renewal offer for EUR 780. Not too bad I thought. A few days later they rang me and asked me if I was interested in renewing, so I said I was but hadn’t decided yet. The guy suggested that he will check if there is anything better than EUR 780 he can do and off he went with all his questions. But suddenly we hit a hurdle: He asked me if I had an Irish drivers license and I said that I still (as for the last four years I was insured with them) had my German license. He claims that that was never on their system (which is rubbish) and he would have to recalculate the price. After a few moments he told me that instead of EUR 780, now the best offer was EUR 1040! Wow! Not having had any accident for many years but having a German insurance suddenly increased my risk by nearly EUR 300? How can that happen? He claimed it is because I got my license driving on the other side of the road. But the fact that I am driving nearly longer on the (wrong ;-) ) Irish side of the road than on the German side didn’t impress at all. Well, there was no going back! AIG was not to be my trusted partner in the future, so I started comparing in earnest and I found VERY interesting things.

I found, for example, that Liberty Insurance is TOTALLY incompetent (or alternatively very greedy OR all the other insurances are the incompetent ones). Why? Well, the insurance cost is meant to be calculated based on the risk that you pose to the insurance and you would expect more or less the same price from EVERY insurance, because it can’t be that you are VERY risky for one and not at all risky for the other insurance. But Liberty seems to live on a different planet then the others. They calculated the cost as EUR 1667 !! Wow! That is even more than AIG wanted after the “change”.

Well, since most others quoted around EUR 780-950, I new that AIG and certainly Liberty were completely mad. (HOW can Liberty get any customers with prices like that???)

I also found out that the insurance quote comparison sites are NOT much use. Chill and Sheridan and Compare Insurance all quoted higher prices than I could get elsewhere. So don’t rely on the quality of the comparisons.

AXA was also madly expensive at EUR 1263. Another outlier.

The lowest quotes I got at first from 123.ie and Aviva and I nearly had decided for 123.ie, but then I remembered that I had forgotten to check with Allianz directly. In the past Allianz was always too expensive and I had already received Allianz quotes this time through the price comparison sites. (Compare Insurance quote EUR 993 and Sheridan quoted 853 – How can there be such a difference for the same insurance for the same conditions??? 140 Euro!?)

But then I rang Allianz and I got SOME surprise! They only quoted EUR 604!! That was by FAR the lowest price (but how can it be so much lower than the Allianz price that Sheridan and Compare Insurance quoted???). And compare this to the mad Liberty Insurance once more?!

So, you can guess who I signed the contract with!?

Now, my parameters are different than yours and therefore you could have a completely different result. So I am not saying that you will get the lowest or the highest quote from the same insurances I mention here. But what I am saying is that the work that you have to put into comparing can easily be worth your time! EUR 400 less than the AIG quote? I am happy to compare prices for 2 or 3 hours for that.

So, COMPARE COMPARE COMPARE and do NOT trust ANYBODY in this business. I think they ALL have no clue!

We are NOT equal!

The European Court of Justice has decided today that men and women are equal and therefore an insurance is not allowed to offer different rates/premiums based on the gender of the insured. RTE News

What does that mean? It means that the car insurance premiums for women will go up and MAYBE the premiums for men will go down. But what else does it mean? It is only a matter of time when an 18 year old driver will go to the European Court of Justice to claim that his is discriminated on age grounds because he has to pay more than a 55 year old and while he has a point, it means that the insurance premiums for the majority of drivers will go up to subsidise the ones that are a higher risk.

Are we taking “equality” too far? We ARE different and it is wrong to think that we are all the same.¬† To pick just ONE example: As long as I can’t be a mother (being male), we are NOT the same and therefore equality in ALL aspects of life doesn’t make sense.

 
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