Car Insurance Premiums Calculated Using Duff Data
Monday, 9. September 2019
There are many similarities between the way that consumers are assessed when taking out car insurance and taking out finance. The main similarity is that decisions are based on either inaccurate or inadequate data and what could be described as illegally biased interpretations.
I will be talking more about the inadequacies of the finance systems in due course but in the meantime the following appeared in Saturday’s Mail regarding Insurance premiums.
Researchers at Which created a series of scenarios to see how much they would be quoted on Confused.com and MoneySupermarket.com. In one, the driver had damaged his car, but had not claimed for the repairs. Two of the cheapest quotes – from Hastings Direct and Churchill – wrongly guessed the driver had made a claim as a result and factored this into the quote.
When this was corrected, Hastings Direct lowered its premium by £10, but Churchill made a reduction of £207 – a cut of more than 25 per cent.
Which? also found that while it is compulsory to declare all recent driving incidents, not all comparison sites let you specify which, if any, led to claims, resulting in some incorrect assumptions.
Which? previously showed how some insurers offer discounts of as much as 15 per cent for using a dashcam, however many comparison websites did not. Seemingly irrelevant questions about lifestyle and personal circumstances also affect quotes.
For example, they were on average 4 per cent cheaper for homeowners and 4 per cent more for divorcees – apparently based on the assumption a divorcee is more likely to have an accident.
It also found that the way drivers describe their job title can influence premiums.
When the driver called himself a painter (working in art), his cheapest was £372, but when he listed himself as an artist, it fell to £343.
Which? Money editor Jenny Ross, said: ‘To beat these quirks compare different routes for buying insurance, look at various levels of cover from different providers, and shop around every year.’
Confused.com said the findings will help them work with insurers to improve their quote process. MoneySuperMarket said: ‘We work with insurers to make sure we ask the right questions, however we do not control how insurers interpret our data.
‘We don’t ask customers to supply the cost of a recent claim as this is often something they will not know – for example, costs may have been paid direct by an insurance firm to a garage for repairs.’
Hastings Direct said: ‘When the customer clicks through to our website, we do give the option to check their data which would enable them to specify further.’
Churchill said: ‘Anyone purchasing through a comparison website can still phone their preferred company to provide any further detail.’ By Graham Hill thanks to Which? And The Daily Mail
