| Monopolies and 'mandatory' products 08:26 - Jan 19 with 649 views | Zx1988 |
Having just paid an ever-increasing sum to insure the car after an eighteenth year of claim-free motoring, I got to thinking this morning..
Is there any practical reason (let's ignore ideological issues for now) why, where a product is legally/technically mandatory (car insurance, home utilities etc.,), or subject to a monopoly (water), the government could not step in and create a state provider of such services?
My thinking was, with insurance, the government provider would sell a basic no-frills product (i.e. designed to cover one's legal obligations and no more), with consumers who want better coverage, or add-ons such as breakdown or legal cover, still able to use the current suite of providers to best suit their needs. |  |
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| Monopolies and 'mandatory' products on 08:36 - Jan 19 with 582 views | Rsj13 |
In essence. I like the idea. However, this would force the Government to underwrite this insurance and therefore pay out on claims, which would be messy from a Treasury perspective. Obviously they could reinsure the book, but my preference would be a very highly - prescriptively - regulated product, where firms above a certain size, profitability, and/market share, are compelled to provide.
I'm a former FCA regulator, and am a very strong believer that if these firms want to get filthy rich playing in this game, then there should be some firmer rules to the game (and not just "this is how you sell", but "if you're massive, this is your role in helping"). This product would hopefully still be profitable, but just a significantly lower margin. But as I say, of you want to get that rich, then there should be obligations attached.
We used to have a pretty robust social contract I think (DB pensions, not sure there were necessarily excessive profits etc), but that's truly dead, especially with the over Americanisation of the corporate world.
Edit: spelling and grammar... [Post edited 19 Jan 8:38]
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| Monopolies and 'mandatory' products on 08:37 - Jan 19 with 577 views | WeWereZombies |
I've often thought the same. All the real work on accidents is done by the police and the health service, include breakdowns and the afters then car mechanics are included. All the insurance companies do is join up the dots. Nationalisation of car insurance could and should ensure more adequate funding for our public services and a more equitable and inclusive commercial backdrop for the user. |  |
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| Monopolies and 'mandatory' products on 08:45 - Jan 19 with 531 views | Zx1988 |
| Monopolies and 'mandatory' products on 08:36 - Jan 19 by Rsj13 |
In essence. I like the idea. However, this would force the Government to underwrite this insurance and therefore pay out on claims, which would be messy from a Treasury perspective. Obviously they could reinsure the book, but my preference would be a very highly - prescriptively - regulated product, where firms above a certain size, profitability, and/market share, are compelled to provide.
I'm a former FCA regulator, and am a very strong believer that if these firms want to get filthy rich playing in this game, then there should be some firmer rules to the game (and not just "this is how you sell", but "if you're massive, this is your role in helping"). This product would hopefully still be profitable, but just a significantly lower margin. But as I say, of you want to get that rich, then there should be obligations attached.
We used to have a pretty robust social contract I think (DB pensions, not sure there were necessarily excessive profits etc), but that's truly dead, especially with the over Americanisation of the corporate world.
Edit: spelling and grammar... [Post edited 19 Jan 8:38]
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I think that has to be the alternative - tighter and tougher regulation, forcing firms to adhere to certain standards before they can pay dividends etc.,
Or even a middle-ground to my proposal, whereby the Government forces all insurers to offer a 'legal minimum' product, based on a certain centrally-set algorithm. The result would be that, based on the same information, 'legal minimum' cover would cost a driver the same with any insurer, leaving them free to choose based on customer service, or any other selling points the individual insurers may choose to use. | |
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| Monopolies and 'mandatory' products on 08:50 - Jan 19 with 521 views | baxterbasics |
Car Insurance is a weird thing, I swear figures just get plucked out of a random number generator when obtaining a quote. Interestingly for me, my quote has been in the £300 to £500 range since I started driving 25+ years ago - as continual premium inflation has been balanced out by my increasing experience and lack of claims. I'm now mid-40's, driving over 25 years, and have a clean licence, so I'm probably at peak "low risk" according to their algorithms.
I've always found using comparisons (via a cashback website) tend to yield acceptable results. Unlike most of you lefty-loons I'm not convinced government getting more involved would improve things. They currently make things more expensive via insurance premium tax or whatever it is called. Maybe they could stop taxing things most of the population are legally obliged to purchase? See also - paying VAT on getting your car serviced. That really ramps things up when you've already spent £300-800 quid getting a new tyre and some break pads. |  |
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| Monopolies and 'mandatory' products on 08:53 - Jan 19 with 498 views | Zx1988 |
| Monopolies and 'mandatory' products on 08:50 - Jan 19 by baxterbasics |
Car Insurance is a weird thing, I swear figures just get plucked out of a random number generator when obtaining a quote. Interestingly for me, my quote has been in the £300 to £500 range since I started driving 25+ years ago - as continual premium inflation has been balanced out by my increasing experience and lack of claims. I'm now mid-40's, driving over 25 years, and have a clean licence, so I'm probably at peak "low risk" according to their algorithms.
I've always found using comparisons (via a cashback website) tend to yield acceptable results. Unlike most of you lefty-loons I'm not convinced government getting more involved would improve things. They currently make things more expensive via insurance premium tax or whatever it is called. Maybe they could stop taxing things most of the population are legally obliged to purchase? See also - paying VAT on getting your car serviced. That really ramps things up when you've already spent £300-800 quid getting a new tyre and some break pads. |
It's the seemingly random variation that's the weirdest thing.
We've gone from having to compare individual insurers, to having to compare the comparison sites.
I ran my quote details through the main four, and no one insurer had the same price across all four. In the end I was able to get Aviva's 'proper' (not the 'essentials' or 'zero' brand) cover for pretty much the cheapest price through one of the portals, whereas it had been about £100 more expensive on the others. | |
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| Monopolies and 'mandatory' products on 08:58 - Jan 19 with 460 views | baxterbasics |
| Monopolies and 'mandatory' products on 08:53 - Jan 19 by Zx1988 |
It's the seemingly random variation that's the weirdest thing.
We've gone from having to compare individual insurers, to having to compare the comparison sites.
I ran my quote details through the main four, and no one insurer had the same price across all four. In the end I was able to get Aviva's 'proper' (not the 'essentials' or 'zero' brand) cover for pretty much the cheapest price through one of the portals, whereas it had been about £100 more expensive on the others. |
I'm due to renew end of this month so have just got a round of quotes in.
Current insurer wants £650 to renew, which would be up there with the most I have ever paid. They really aren't interested in retaining business are they?
On the comparison, the quotes range from £275 (nice!) to £1200 (WTF?).
I'll take the third cheapest quoted at £305 as it includes windows and legal, and no admin charges for changing details mid term. That +£40 for creating a PDF always annoys me. | |
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| Monopolies and 'mandatory' products on 09:00 - Jan 19 with 451 views | tcblue |
| Monopolies and 'mandatory' products on 08:53 - Jan 19 by Zx1988 |
It's the seemingly random variation that's the weirdest thing.
We've gone from having to compare individual insurers, to having to compare the comparison sites.
I ran my quote details through the main four, and no one insurer had the same price across all four. In the end I was able to get Aviva's 'proper' (not the 'essentials' or 'zero' brand) cover for pretty much the cheapest price through one of the portals, whereas it had been about £100 more expensive on the others. |
Different insurers have different risk balances and policies which fluctuate. Unless they specialise in a market sector (not sure if Sheila's Wheels still exists) then their underwriters need to hedge their bets and not write too much risk into one market sector.
I would like to see regulation enforced where (unless there has been some mitigating factor, such as a claim), that renewals more than, say, 15% on.the previous year cannot be automatically applied. I guess though that would result in lots of uninsured drivers as not everyone reads their spam | | | |
| Monopolies and 'mandatory' products on 09:01 - Jan 19 with 441 views | NthQldITFC |
Absolutely.
We'll never get rid of this aggressive cancer of aggressive capitalism, but we could live with it and constrain it with sensible policy like this, and medicate and possibly start to heal our highly vulnerable and badly degraded systems of society and environment. |  |
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| Monopolies and 'mandatory' products on 09:05 - Jan 19 with 430 views | PhilsAngels |
The legal minimum motor insurance is the RTA Road Traffic.
All insurers put money into a fund. For when those who decide not to take out legally required insurance and cause accidents, the fund pays for the costs, which in turn is paid for by all those legally paying insurance.
So you are paying for those who do not pay. Would a legal minimum cover make those same people buy insurance , no it would not.
Also bear in mind that you are paying not only for the damage to your vehicle and the continuing rising costs of repairing or replacing vehicles, but the possible costs you may cause to third parties.
When you have your car serviced, you know the labour rate per hour. Imagine that repairing a vehicle, along with utility costs, parts costs. Vehicles becoming more complicated to repair.
All the new gadgets on your car all come at a cost, both when you buy new, and to repair. A friend of mine just had a battery problem on a hybrid car. How much do you think they were quoted for a new battery on that hybrid vehicle.
£7,000 to replace the battery. You want to know where costs to insurers come from, that is an example right there. | | | |
| Monopolies and 'mandatory' products on 09:07 - Jan 19 with 425 views | PhilsAngels |
| Monopolies and 'mandatory' products on 08:50 - Jan 19 by baxterbasics |
Car Insurance is a weird thing, I swear figures just get plucked out of a random number generator when obtaining a quote. Interestingly for me, my quote has been in the £300 to £500 range since I started driving 25+ years ago - as continual premium inflation has been balanced out by my increasing experience and lack of claims. I'm now mid-40's, driving over 25 years, and have a clean licence, so I'm probably at peak "low risk" according to their algorithms.
I've always found using comparisons (via a cashback website) tend to yield acceptable results. Unlike most of you lefty-loons I'm not convinced government getting more involved would improve things. They currently make things more expensive via insurance premium tax or whatever it is called. Maybe they could stop taxing things most of the population are legally obliged to purchase? See also - paying VAT on getting your car serviced. That really ramps things up when you've already spent £300-800 quid getting a new tyre and some break pads. |
Insurance premium tax, the tax started by the Tories then | | | |
| Monopolies and 'mandatory' products on 09:14 - Jan 19 with 405 views | bsw72 |
| Monopolies and 'mandatory' products on 08:53 - Jan 19 by Zx1988 |
It's the seemingly random variation that's the weirdest thing.
We've gone from having to compare individual insurers, to having to compare the comparison sites.
I ran my quote details through the main four, and no one insurer had the same price across all four. In the end I was able to get Aviva's 'proper' (not the 'essentials' or 'zero' brand) cover for pretty much the cheapest price through one of the portals, whereas it had been about £100 more expensive on the others. |
Each comparison site has its own commission structures and agreements with insurers, which can affect the prices you see - remember nothing is ever free so to get listed there almost always has to be a reciprocal action 
So, the same insurer might offer different prices on different portals because of how those sites negotiate rates or package policies. Plus, insurers sometimes offer exclusive deals or discounts through specific comparison sites to attract customers.
As for insurance itself, companies are having to underwrite considerably more than just the cost of repair / replacement.
The actuarial data and risk models, which insurers use to predict future claims and set premiums, vary year on year due to changes in claims frequency and severity, evolving driving behaviours, new vehicle technologies, environmental factors, regulatory shifts, fraud levels, personal injury legal costs, and economic inflation.
In recent years, the rising complexity and repair costs of modern vehicles, especially with the increased use of electric vehicles compared to fossil fuel cars, have been major drivers of higher insurance costs.
Not ot mention a significant increase in personal injury legal costs and related fraud cases have further contributed to rising premiums as these are being bourne by insuarnce companies.
All these factors lead insurers to adjust premiums annually even for drivers with clean records to ensure they can cover rising costs - not forgetting that these companies are also accountable to shareholders, so need to show profit.
Not sure gvmt provided basic insurance scheme would help - have you seen the mess the NHS is in . . . |  | | |
| Monopolies and 'mandatory' products on 09:41 - Jan 19 with 363 views | baxterbasics |
| Monopolies and 'mandatory' products on 09:07 - Jan 19 by PhilsAngels |
Insurance premium tax, the tax started by the Tories then |
Yup, happy to call it out even when 'my team' is responsible.
In fact it makes it even worse in my mind. I mean, another example, *sugar* tax FFS. Nobody who voted Conservative wanted or expected this. Now it's embedded and gosh darn if it isn't hard now to find a full sugar coke on the refill machine these days. | |
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| Monopolies and 'mandatory' products on 10:50 - Jan 19 with 244 views | Basuco |
A bit like National Insurance then? Everyone in the UK pays in and only a very small percentage use the service (make a claim) Costs would plummet because many people like you, would not claim for many years, and removing the enormous profit element from insurance companies. |  | | |
| Monopolies and 'mandatory' products on 10:59 - Jan 19 with 228 views | J2BLUE |
I got to thinking should be an instant ban.
Hideous American phrase. |  |
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| Monopolies and 'mandatory' products on 11:15 - Jan 19 with 194 views | lowhouseblue |
why would civil servants / politicians have the skills to run an efficient insurance business? much better to regulate the private market if due to lack of competition it is failing to provide the right mix of products. |  |
| And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show |
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| Monopolies and 'mandatory' products on 11:16 - Jan 19 with 193 views | Kievthegreat |
Why would the government offer anything significantly cheaper than the market? You can buy products without add-ons like breakdown, legal, etc... already. The state could provide cover without need to be profitable, so maybe 10% cheaper? However it would need to build a whole new department and all that entails. Also needs the taxpayers to underwrite those motorists.
Also if the price of running a car is to too expensive, don't have a car. It's not legal or mandatory to own one and I don't see why the government should help someone to.
Also I don't really understand the point of bringing water utilities into this discussion either. The situations aren't remotely comparable. Feels like you mention it so that your idea of government backed insurance doesn't seem as bizarre. [Post edited 19 Jan 11:17]
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| Monopolies and 'mandatory' products on 11:23 - Jan 19 with 163 views | EdwardStone |
| Monopolies and 'mandatory' products on 11:16 - Jan 19 by Kievthegreat |
Why would the government offer anything significantly cheaper than the market? You can buy products without add-ons like breakdown, legal, etc... already. The state could provide cover without need to be profitable, so maybe 10% cheaper? However it would need to build a whole new department and all that entails. Also needs the taxpayers to underwrite those motorists.
Also if the price of running a car is to too expensive, don't have a car. It's not legal or mandatory to own one and I don't see why the government should help someone to.
Also I don't really understand the point of bringing water utilities into this discussion either. The situations aren't remotely comparable. Feels like you mention it so that your idea of government backed insurance doesn't seem as bizarre. [Post edited 19 Jan 11:17]
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Although I believe in Australia there was a Govt. backed basic insurance.
I remember a convo with an Aussie who told me that the mandatory annual MoT test also included your 1 year Road Fund licence and a year's no frills 3rd party insurance
It cost a cuppla hundred quid, but at a stroke it eliminated a lot of untaxed/uninsured motorists being on the road.
The fine for not having the annual Test was steep....very steep |  | | |
| Monopolies and 'mandatory' products on 13:09 - Jan 19 with 86 views | SuperKieranMcKenna |
Firstly car insurance isn’t profitable - or at least hasn’t been post-COVID. Thank ever increasing inflation on car repairs for that. So it’s not a profit grab, just inflation still working through the system. Some of it is the fault of EU regulation (I.e mandatory tech). Back in the day you could replace a bumper or windscreen cheaply for example - now it’s full of expensive sensors.
Some countries have state run schemes, but it’s fairly pointless, since:-
- you haven’t got the scale of a multinational in terms of administering the product (I.e it’s not cheaper for the state to provide).
- much of the risk will end up in the private market anyway so there are costs at the back end.
- imagine the uproar with failing public services, whilst the state is sat on billions of idle capital (which it would have to hold to comply with regulators and ensure liquidity).
-do you really want your taxes going on subsidising someone driving a V8 suv, or could it be put to better use on services. [Post edited 19 Jan 13:17]
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