It seems that motoring Mums and daughters are the silent audience that car insurers are targeting from December onwards so they can underwrite more profitable business in future.

This is unfair treatment of women drivers however you look at it and nobody, other than FOXY Lady Drivers Club of course, seems prepared to stand up for women’s best interests here.

Reading about the subject I find that young women take an average of 51.9 lessons from qualified driving instructors compared to 36.2 for young men (DfT research 2004).

Perhaps that’s one of the reasons why most young women drivers are safer and more considerate than many young men?

And why it makes little sense to rate young men and young women drivers as the same motor car insurance risk; which is precisely what is due to happen as a result of the forthcoming gender equality ruling in December 2012. Which is deeply unfair to most women drivers because it flies in the face of years of statistics that prove different gender motoring profiles.

To the extent of being sexist and ageist even?

Add to this the perennial debate that young drivers need more lessons such as taking a PassPlus course to gain insurance discounts…

Yet if I had invested in 15 more lessons than my male counterpart before passing my test (at an average £20 per lesson that’s c£300 more I’d have spent), I’d feel I had paid enough already. And if that difference was PassPlus or got me an insurance discount, I’d say that was self evident.

Like it or not driving ability is a gender thing and age is a key consideration too. Young men are naturally more confident drivers (it’s proven to be because of testosterone levels) than many young women hence their seeming to need fewer lessons before passing their test.

But this is but a false dawn because statistics confirm men attract 92 per cent of all driving convictions and 98 per cent of convictions for dangerous driving. So the driving test isn’t preparing them for a safe driving career whereas perhaps more lessons might…

According to the UK Treasury, taking gender out of the car insurance equation will result in a general levelling of premiums, with women under 45 paying an extra £920 million a year with men paying £620 million less. Women under 25 could see their premiums leap by a quarter, while men the same age will save 10 per cent. And there’s an interesting £300 million gap…

The outcome is clear – simply raising insurance prices for women isn’t going to result in fewer accidents – all it will result in is that young women pay for accidents they don’t cause and insurers get richer.

Or put another way – women drivers are being taken to the cleaners.

FOXY Steph

“What you need is sustained outrage – there’s far too much unthinking respect given to authority” Molly Ivins, American humorist and political commentator 1944 -2007

This blog entry is as a result of an an email from Elizabeth in Leeds who is a Club member.

Her experience echoes that of other members who are baffled when an insurer pays out in what is typically a no fault accident situation. And who worry that their premium or No Claims Bonus might be affected.

What seems to be happening is that whenever there is a liability dispute (which, let’s face it, insurers encourage by telling motorists not to admit liability even when it’s clearly their fault) both insurers are accepting shared costs (called a ‘knock for knock’ basis) rather than taking this further to identify the guilty or fraudulent party.

Simply because it is often cheaper to pay out on this basis than argue the toss…

This is what Elizabeth tells us about her experiences. Her comments about dealing with uswitch remind me why it can make sense to shop in advance and double check a comparison website later I you aren’t happy as obviously deals can change…

“I have recently renewed my car insurance. I tried uSwitch about 2 ½ weeks before renewal and did not much like the premiums. I tried again 2 weeks later and the premiums were 250 pounds cheaper! I chose a company, which I knew was affiliated with my existing one, but it turned out that they are the same company. So I have ended up with the same company, but at the price I found on uSwitch.”

“By the way, I have chosen a high excess because I have found that if you have an accident with a lower excess, it gets added to your premium anyway. The financial penalty for claiming for small amounts is larger than the claim.”

“I had an incident nearly 2 years ago when someone claimed I had hit her car and caused damage. I was not aware of anything and there is no way that my car could have caused that particular damage. She harassed me to the point where I had to go to my local police station. They got her to stop. In the end my insurance company (not the current one) settled in error, having received no proof at all from her. I reported this incident to my current insurer last year, but now it seems to have disappeared from their records.”

“I have had numerous instances where damage has been caused to my car when I have not been there – and of course no one has owned up.”

FOXY’s advice is always to tell the insurance company the full facts and if you know nothing about any accident or you deny any liability ask them to confirm that they have recorded this as a no fault accident. In these circumstances it would seem unreasonable for the insurer to inflate your premium or downgrade your No Claims Bonus as a result.

And whilst the ‘knock for knock’ settlement system seems lazy and unscientific ie  ‘we’re not sure who’s guilty so let’s split it’ we do appreciate that the time this takes to sort out can be more costly than a 50:50 formula.

If any motorist feels her insurance premium has been inflated by a previous accident that was not their fault they should check whether that accident has been scored against them on their policy. If the insurer is unwilling to review this as a no fault accident and perhaps your no claims bonus has been affected, please let us know the details. And shop around for  a better renewal deal.

I should add that this is going to be doubly hard to police in the lead up to insurers imposing gender equality ratings from December 2012 onwards. This is when insurers will be allowed to charge ALL women drivers more than they have been paying despite the statistically safer driving record of young women drivers compared to young male drivers in particular.

There is nothing fair about this ‘equality ruling’ when it comes to common rating genders for car insurance premiums…

FOXY Steph

NB: FOXY Lady Drivers Club includes a female friendly accident assistance service to help members and their family after an accident. Providing you contact them before your insurer, they can advise you of your best option in the circumstances. If you don’t claim against/via your insurer but get our service to claim from the liable third party there can be no doubt of this claim adversely affecting your premium in future.

Last year Juliane Kokott a German mother of six and EU Equality Commissioner passed a ruling so that women drivers are to pay the same motor premiums as men from December 2012.

How she must dislike her own gender despite our safer driving records.

As such she has surely opened the door to potential claims of ageism and sexism in the face of statistical evidence that most young women are safer drivers than many young men who are known to cause the majority of the UK’s fatal, serious and very expensive road accidents.

But why has she done this?

Q    Will this ruling save young lives?
A    No. It might even encourage more young men to drive than before because of cheaper car insurance for them.

Q    If this was your insurance business would you charge cautious and feckless drivers the same premiums for the same cover?
A    Of course not.

Q    Who will benefit most from this?
A    Young men and motor insurers because female premiums will rise a lot and male premiums will fall a bit, leaving more profit in between.

Q    Who is footing this bill to include the cost of so many road accidents caused by men?
A    Female motorists.

Call it equality if you like but it isn’t fair on UK women drivers.

Expect to hear more from me about this throughout 2012 as car insurance premiums for women drivers start to rise…

What do you think?

FOXY Steph

Have you ever faced a fraudulent accident claim that wasn’t anything to do with you? If so, please tell us what happened.

Wendy is a member of FOXY Lady Drivers Club and lives in Hampshire. She wrote to us recently after reading our December Club newsletter including details of a recent car accident and FOXY’s accident management support service.

And whilst we do hear about fraudulent insurance claims we hadn’t heard Wendy’s unusual experience before.

This is what she told us…

“Last year we did NOT have an accident but someone made a claim against us in December for an accident that was supposed to have happened in the previous August. The insurance company paid out against it because my car has a crack in the number plate which they said could have happened in an accident even though I can supply witnesses to prove it was cracked on the drive when my daughter left the hand brake off and it rolled into the garage door. I even have the dent in the garage door!

I never reported an accident because I did not have one. The only related thing we could think of later was when 2 men in the car in front in a stationary traffic queue got out of their car and spoke to my daughter, who was driving on her own. They said they thought she had gone into them but then agreed that she probably hadn’t and there was no damage…”

————————————-

The problem is of course that nobody is going to report an accident that did not happen.

But Wendy wants to caution people to report anything out of the ordinary like this in future just in case someone tries to scam you later. At least it may help and may even prevent the same thing happening again?”

Thank you for bringing this to our attention Wendy and I hope enough women read this to be on their guard in future.

Wendy is waiting to see how her insurance premium is affected at renewal time. It will be most unfair if she loses out as a result of a non-existent accident… as claimed by a motoring rat.

FOXY Steph

In FOXY’s experience, the OFT’s well-publicised ‘Your Car, Your Choice (of car repairer)’ advice isn’t working as it presumably was intended.

The Office of Fair Trading recently asked interested parties to comment “Whether there is work that the OFT or other parties could be doing to improve the way that the UK private motor insurance market is currently functioning.”

FOXY made four points in all including this one to do with car insurance and accident repairs; as ever seen from a female motorists’ perspective.

We said…

The OFT’s well-publicised ‘Your Car, Your Choice (of car repairer)’ promise isn’t working as intended. For example, the largest insurer in the UK is charging a supplement to deter motorists from making this choice at http://www.aviva.co.uk/car/summary-of-cover.html stating

“If following a claim your car needs to be repaired and you decide not to use our approved repairer then an additional excess of £200 applies. This excess will apply in addition to any other excesses under your policy. Using your own repairer may also cause delays in your claim and Aviva cannot guarantee quality of repair from your chosen repairer.”

Esure is even more specific and restrictive in their terms at http://www.esure.com/car_insurance/claims_faqs stating

“Please note that if you choose to use your own repairer:

• You will not receive a courtesy car unless this is agreed directly between you and your repairer
• An excess of £200 will be applied in addition to any other excesses shown on your schedule 
• The repairs, unlike those carried out by one of our recommended repairers, will not be guaranteed for 5 years – unless your own repairer offers this 
• The repairer, unlike our recommended repairers, is not contractually obliged to provide a specific level of service to you 
• We will not be able to assist you with any aftercare issues.” 

In addition, many customers who drive big family cars are expected to cope with a Class A courtesy car after an accident, such as a Ford Ka or Nissan Micra which are often poor alternatives. 

We are also told about some insurers working with unqualified bodyshops. Assuming that others will provide this evidence, we worry that these insurers might be putting cost considerations ahead of vehicle safety and customer service after an accident.

Finally, few motorists realise that their insurer isn’t necessarily their best first contact after a stressful accident or when someone is reeling from the shock. For example, we have heard about insurers increasing renewal terms for motorists simply because they have reported a no fault accident; this seems very unfair. 

Yet there is little written about this subject to help motorists understand their choices of accident repair centre or to encourage them to report their feedback about the quality of work done, to an independent body and for the benefit of others.

* FOXY Choice has made a start here with an independent good garage guide for women and a good garage feedback area.

As a result, few motorists know how to find a measurably competent accident repair centre and, because competing quality schemes (OFT, BSI and car manufacturers) are all batting to sell their own as the best, there is scope for considerable confusion in motorists’ minds instead of the independent help and appropriate advice that is needed instead, following the stress of an accident.

What can be done here? We’d like to see

• A minimum standard for all ‘approved repairers’ appointed by insurers; based on stated quality and monitored annually.
• A transparent replacement/courtesy car policy so that motorists who need larger cars are not required to make do with a small car whilst theirs is being repaired.
• Clarification of the OFT’s ‘Your Car, Your Choice’ promise in the light of current insurer practices.
• Revised OFT advice to reflect reality
•  An independent online resource where motorists can choose measurably qualified* accident repair centres (ARCs) and bodyshops in their area. *ie those that are either BSI Kitemark (car bodyshop) licensees, operate to an OFT approved code (a member of VBRA) or are approved by car manufacturers.

The moral of this story is to get the magnifying glass out and always read the small print before buying car insurance. But the reality is that we rarely do because there’s too much of it to read and we were shopping for the cheapest quote anyway.

FOXY Steph

Find out about FOXY’s female friendly accident assistance service and about qualified accident repair bodyshops near you that have joined the FOXY Choice approved female friendly UK garage network.

Did we want equality or simply fairness?

Many motor insurers are adopting a Pontius Pilate approach to drivers under 25 which amounts to unfair age discrimination against young women who are safer drivers than young men.

Young women are not the same insurance risk as young men. In general, women take longer to pass their test, are less confident and less likely to speed compared to their young male counterparts. Statistics confirm it is young men who are responsible for the majority of serious and fatal road accidents.

I can understand why some motor insurers decline insurance for male motorists aged under 25. The evidence is written large and clear in the UK’s road accident statistics. And of course, some insurers see this as a business opportunity, charging eye-watering premiums that some say are actively encouraging the claims culture to recoup the premium cost… If true, this would be a self-fulfilling and self-defeating circle until the insurance industry gets its act together and agrees a strategic approach towards the young male driving risk.

As things stand, by refusing to underwrite ALL motorists who are under 25, many insurers are effectively discriminating against young women drivers who are the safer and better car insurance risk. These motorists have LESS choice of insurers so available rates are LESS competitive. Young women are therefore being tarred with the same risk brush as young men and are having to pay MORE than they would for their car insurance otherwise, simply because of their age.

Why is that happening now? First of all, it doesn’t make commercial sense because the sooner insurers start their customer relationships with women the more likely they are to reap our loyalty and referrals. Secondly insurers aren’t required to charge men and women the same car insurance premiums until the EU equality ruling takes effect in December 2012. When premiums will rise a lot for all females of course.

How can this be fair for female motorists? Why isn’t anyone standing up for our rights here? Has it ever been any different I wonder…

Some say that all these efforts to increase rates and reduce risk are designed so that insurers can regain lost profits after some lean and excessively accident prone years.

Hence the average 40% increase in rates in 2011 to date. And which seems to have happened without anyone needing to approve this level of increase.

Fortunately both the Ministry for Justice (MoJ) and the Office of Fair Trading (OFT) have been/are looking at different aspects of how the car insurance market is working so we can only hope that the issue of fairness will be addressed alongside that of equality.

Roll on the Ministry of Justice’s implementation of the ban on personal accident referral fees (it’s a start) and the OFT’s Call for Evidence review looking at ways to improve how the car insurance market is working.

FOXY Lady Drivers Club will be explaining to the OFT why this market isn’t operating fairly at present for women drivers with a particular emphasis on young women under 25 years old.

Please contact me via steph@foxyladydrivers.com if you have any recent experience about motor insurance premium hikes and/or claims/accident handling to add weight to our submission.

FOXY Steph

Have I got this right?

Is there such a thing as a poor rather than rich insurance company?

One of the reasons I ask, if I heard this correctly in the first place, is because I distinctly remember reading that insurers hadn’t made money from car premiums for a good few years; all to do with accident claims and associated legal expenses apparently.

But this clearly isn’t the whole story as in the case of Admiral who have just declared pre-tax profits from January to June 2011 of £160.6m, up by a dramatic 27% compared with the same period last year. And total sales for these six months rose by more than 50% to pass the £1 billion turnover mark representing 3.15 million customers, up from 2.37 million in 2010.

Nowadays Admiral is a global insurance business, but these are the brand names most of us will recognise in the UK…

Admiral    Typically for those who pay higher than average premiums such as young drivers and those living in cities with higher risk ratings. Also offers multi vehicle policies.

Bell    Mainly for drivers with a Zero no claims bonus.

Diamond    As the song goes ‘Diamonds are a girl’s best friend’ and this Diamond sells insurance products to women.
NB: Whilst premiums are said to rise for females to meet EU equality demands from December 2012, will they need to when young men (the expensive risk) are unlikely to want to buy a product designed for females? So there is no reason to common-rate premiums surely…

elephant.co.uk    A wholly online car insurance service with lower overheads and prices as a result.

Confused.com    One of the best known UK insurance comparison websites including online quotes from all the major car insurance websites.

As impressive as all this profit is, we are told that Admiral’s loss ratio has increased significantly ie the amount paid out in claims divided by the amount collected in premiums to 77.5% in 2011 from 67.8% in the same six month period last year.

Could this be down to our bad weather last winter I wonder?

Needless to say I don’t know if this ratio is calculated before pre-tax profits are declared or after but I certainly wouldn’t describe Admiral as a ‘poor insurer’ which ever way the story gets told. But it’s likely that other insurers might be considerably less profitable because they aren’t as well run or as ambitious or they don’t have their own comparison website.

In which case I don’t think we motorists should be expected to shore up mediocre insurance providers with increased premiums. Let’s hope that the profitable businesses can afford to offer us more competitive premiums as a result; that’s what competition should be all about and if some can’t make the grade then it’s highly likely we won’t need them in future.

By all means explain the mechanics of all this to me if I have this wrong in my mind because the insurance industry is not as squeaky clean as it might be in my experience, especially when it comes to accident claims, high excesses and associated referral services.

Fortunately profitable insurance providers like Admiral can afford to lead the field through best practice and I hope they do just that. My particular interest is in seeing low motor insurance premiums for young female motorists in recognition of our (usually) safer driving record.

So I particularly object to the EU telling us what to do in our country as in ‘you must charge women and men the same insurance premiums’ masquerading as gender equality but which flies in the face of underwriting logic based on risk and experience.

Whatever makes the EU think they know what’s best for us; better than we know for ourselves?

FOXY Steph

I thought I knew all about multiple vehicle car insurance policies but I clearly didn’t. We are now unable to get our 18 year old son insured for less than £2500 per annum on a car worth c£1k.

For many years I have recommended the benefits of multiple vehicle motor insurance policies to others (by word of mouth to friends I hasten to add, FSA) but I have just discovered a downside that I certainly was not aware of until recently.

My husband and I change our family car ‘fleet’ quite often; his hobby is restoring cars. Some stay SORN’d for ages and others come and go at whim. This is rarely a profitable activity I hasten to add…

Which is why a multiple vehicle policy makes best sense for us because we aren’t driving them all at the same time and the risk is therefore reduced on each. All we have to do is phone our insurance broker to say add or remove one and we pay an amendment fee of £20 plus any premium adjustment.

So far so good. Until we come to insure our 18 year old son who is learning to drive this summer. The plan was for him to have c20 hours of paid for lessons plus a further 20 hours of driving with Mum or Dad. Job done we imagined…

But our multiple vehicle insurer doesn’t insure motorists under 25, full stop. And I can understand why of course and I should be pleased if our premiums reflect this, but that’s small beer when this affects me personally…

And if I then extract a low cost vehicle (2001 Citroen) from our multiple car insurance policy to insure Mum (with full NCB) and son elsewhere, I cannot carry any No Claims Bonus with me because it’s being used by our existing insurer. The end result is that to insure us both on a car worth c£1000 it’ll cost something like £2500 for the year with a compulsory £400 excess on any claim.

So, to get our son through the test it’s going to be cheaper for him to have another 20 lessons @ c£480 (AA Driving School rates – we’ve already claimed FOXY’s £36 discount from the first batch of 12) or to shop around for the cheapest driving instructor… which seems to defeat the purpose of choosing the AA Driving School for a fully qualified instructor. And then we start again, looking for car insurance quotes when he has a full license and hopefully will have a part time job to contribute to the cost.

Do we have any other choices? Please tell me if you know better.

To drive uninsured isn’t an option of course, but I’m not surprised to read that others break the rules here. Nor am I shocked to see young drivers actively clawing back the outlay in terms of accident claims (as per the recent Panorama TV programme).

Is this the best way to do it insurers? Shouldn’t you be investing in educating young drivers under 25 not simply washing your hands of them? And to think this will get even worse for female motorists come December 2012.

I’d like to think the motor industry is discussing a better strategy to insure young drivers. But I’m not holding my breath.

FOXY Steph

Fraud and insurance scams costs the UK £30.5 billion a year and dishonest insurance claims alone cost nigh on £2 billion a year which adds an extra £44 per year to every female household’s general insurance budget.

As if the cost of car insurance isn’t high enough already for women drivers.

The largest fraud case the motor insurance industry has ever seen was in April 2011 when 39 members of a Luton gang were involved in a £5.3 million ‘cash for crash’ insurance scam. Called Operation Exhort this involved a five year investigation by Bedfordshire Police and three defendants were jailed. I hope for a long time. And a further 33 defendants pleaded guilty to a variety of related offences.

But it isn’t always big fraud like this that gets centre stage billing and it can involve women drivers taking a leading role. Take the story of two female friends who staged a car crash to cheat an insurance company out of £11,400 last July.

Katie Ashcroft, aged 24, and Jodie Jackman aged 23 colluded to fake an accident and arranged for a ‘Mr Fixit’ to crash their cars into each other before ringing their insurance companies to make a fraudulent claim. Friends and family members then pretended to be passengers in the cars and filed fake injury claims. The scam was only exposed when emails between the pair were found.

How fortunate that emails like this can be found in suspicious circumstances…

If you know of an insurance scam please report this via the Insurance Fraud Bureau. They offer a free and confidential Chatline at their website.

FOXY feels VERY strongly about this because it’s time that honest motorists stood up for themselves and outed the flagrant dishonesty of others who expect us to pay for their fraudulent gain.

FOXY Steph

Now that the EU is dictating common-rated gender car insurance premiums in future, fewer young women drivers will be able to afford to learn to drive and those that can will surely face the full force of motor insurance scams which are more likely to be caused by and involve men.

According to Confused.com the average fully comprehensive car insurance premium rose by 38% in 2010 and now stands at £695. These rates are influenced by the fact that 15% of young drivers currently cause 31% of all accidents leading to 40% of all motor insurance claims. As things stand, the average premium for a 17-20 year old male is currently a staggering £2,976 and for women £1,694. Come December 2012 women will pay considerably more than they do now and men slightly less we think – either way this is more than most young drivers will pay for their first car.

Which is why I see this as the equivalent of a new and unfair ‘tax’ on young females in particular from working and middle class families, facing higher University fees on the horizon and who probably can’t afford to drive in future now that the cost of insurance will rise so much. The truth is that  children from more wealthy families stand a much better chance of their parents paying for their car, their insurance and their education. Which seems unfair to me.

No wonder insurers are worried if fewer (of the safer) motorists can afford their products in future.

The reason car insurance premiums have risen so much for men and women drivers alike is to pay for accidents caused by uninsured drivers, for staged ‘cash for crash’ accidents and the ever increasing practice of submitting fraudulent claims. All of these have a self fulfilling and cyclical feel to them in that the higher the premiums, the more appealing it is to drive uninsured or to prepare a fraudulent claim; therefore the higher the premiums need to be to pay for them and so on…

Confused.com wants better data sharing between the DVLA and insurers to help reduce instances of fraud. Quite right. They also want the test to be harder but we see this as a crude method to clobber young women again when we aren’t the real risk on the roads. It’s the young men who cause the majority of serious accidents remember, being much more confident drivers more likely to put their foot down, and who tend to pass the test after fewer lessons than more cautious women. Which is perhaps why we are the safer drivers I feel.

So any attempt to make the driving test tougher for us is likely to hit young women harder than young men; and cost us even more to pass than it does already.

This is all such a mess.

In an attempt to be seen as politically correct when dealing with Mars and Venus matters we are clobbering less confident and more cautious young women drivers when we should be tackling the more accident-prone male mindset here. We should rate men as the known risk they are, invest some of their premium in gender marketing & education and reward the god male drivers. Is that so very difficult to do? And similarly with women…

Just don’t rate women the same as men when we aren’t.

Making the driving test harder, re-assessing the Pass Plus scheme, getting insurers to offer discounts for those who have had additional training and increasing the use of telematics devices (which Aviva pioneered and discontinued for cost reasons…) should all be reviewed of course.

But the penalty for being caught driving uninsured is ludicrously low – a maximum £1,000 with an actual average fine of £200. When they have saved so much money on not being insured? Who thought that formula up I wonder?

We should all be expected to wear our insurance on our windscreens like tax and any car with out of date or non existent evidence of insurance (this applies to SORN’d cars too I believe) should be reported by passing motorists. The penalties need to be a lot more realistic and punitive. If it was down to me I’d confiscate cars and licenses and make those that offend pay the costs of doing this.

Something needs to be done to stop women becoming the soft target for even more unfair increases in their insurance.

FOXY Steph

If you feel this is unfair, please join FOXY Lady Drivers Club and add your voice to ours – women drivers need to be heard not forgotten after the EU ruling.