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B535 - Car Insurance Fairness Bill 2013 watch

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    B535 - Car Insurance Fairness Bill 2013, TSR Government



    Car Insurance Fairness Act 2013


    An Act to ensure that car insurance customers receive quotes based on a re-constructed, fairer system.



    BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:-


    Part I: Reforms
    1 Abolition of car insurance age grouping
    (1) Insurance will not be based on grouping, but by singular age
    (2) There will be a limit of money to how much age applies to your overall quote.
    (3) Maximum of £300 applies to all quotes.


    2 Reform of the postcode rating system
    (1) A-F rating system changed to A-D rating system. This will limit the overall amount of the Insurance quote.
    (2) Maximum of £1,000 applies to all quotes.


    3 Removal of vehicle location as a factor
    (1) This rating system will be abolished completely.
    (2) This will no longer affect the insurance quote given.


    4 Reform of vehicle insurance groups (VIGs)
    (1) This system is to be changed from the current 1-20 grouping system.
    (2) The new system is to have a grouping system of 15 groups, with 1 being the cheapest insurance group and 15 being the dearest.
    (3) Insurance prices will remain at their current rates.


    5 Enforcement
    (1) Failure to comply with any of the above regulations will lead to the revocation of an insurance company's license to trade, though only after a minimum period of twelve months, with a written warning issued at the beginning of each month.
    (2) Enforcement is the responsibility of the Department for Trade and Industry.


    Part II: Miscellaneous
    6 Short title
    (1) This Act will be cited as the Car Insurance Fairness Act 2012.


    7 Commencement
    (1) This Act will come into effect on the 1st January 2014.
    NotesSection 1
    Insurance companies bulk age groups together when assessing risk. To me this is silly, as this is a very inaccurate and blunt way of doing it when you consider that the companies are fully able to assess by singular age.

    Section 2 & 3
    The reputation of a car-owner's area should have less influence on their quote; this discriminates against people in areas with higher crime rates, which - because of the correlation between crime and poverty - is a hidden way of making it harder for people in impoverished areas to buy and use cars legally. Equally, the size of a person's property should be less of a factor.

    There is a system to determine how your insurance based on where you live. Car insurance companies having a "post code rating" system where they can rate the area that a person lives in. This rating has a range from A to F. "A" being a good low risk crime area and an "F" being a high risk crime area. I would remove the E and F from this allowing only A to D, to limit the insurance differential.


    Section 4
    There are so many different vehicles out there offering so much choice in popularity/speed/cost, each vehicle has an insurance group rating. Smaller engine, lower cost cars such a a 1 litre Fiesta will have a lower group insurance than a faster more expensive car such as a Ferrari. Insurance Groups range from 1 to 20. With a car in insurance group 1 being less to insure than a car in group 20, which will cost more to insure. So the higher the insurance group your car falls into the higher the insurance is likely to be. I propose that we limit the amount of insurance groups. Instead of 1-20, I'd bring to down to 1-15, while making sure the insurance quote for each group remains the same. The same goes for the A-D grouping for where you live.
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    Great Bill.
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    aye
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    Aye. A very good bill contributed by a new member.
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    What purpose is served by Section 4? It seems to be a pointless tinkering with a system which is working. All it can do is make the system less precise, effectively punishing people who would have been in lower groups when there were 20 but now find themselves in the lower part of one of the 15.

    The vehicle location factor is important, as a vehicle locked in a garage or secure car park is provably less likely to require insurance payout for vandalism than one on the street. As you offer no justification in your notes, I will ask, what do you hope to achieve by forcing companies not to ask, other than their charging everyone the maximum?

    As to the rest of it, it will serve only to increase overall prices, especially for the safest drivers.
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    (Original post by chrisawhitmore)
    What purpose is served by Section 4? It seems to be a pointless tinkering with a system which is working. All it can do is make the system less precise, effectively punishing people who would have been in lower groups when there were 20 but now find themselves in the lower part of one of the 15.
    How is this punishing people in the lower groups? It means people who are in insurance groups 16-20, will be getting their insurance for the price of that in group 10-15 (Depending on how the insurance company wants to distribute those cars into which group. The Cars already in 1-15 cannot be switched to increase insurance for those cars, those will remain the same)

    The vehicle location factor is important, as a vehicle locked in a garage or secure car park is provably less likely to require insurance payout for vandalism than one on the street. As you offer no justification in your notes, I will ask, what do you hope to achieve by forcing companies not to ask, other than their charging everyone the maximum?
    It's pretty easy to break into a garage or a 'secure' from personal experience living in Belfast, iv'e seen just as much cars being vandalized and stolen from garages and 'secure' car parks as there have been on the streets, and the point of demolishing this is, if your the 'F' group when it comes to the Post Code system and you have a car parked in the street, the price will almost double, which is stupid if you ask me...iv'e been quoted up to 9,000 online for insurance...no thanks.

    As to the rest of it, it will serve only to increase overall prices, especially for the safest drivers.
    I'm sure you've heard of 'No claims Bonus'...the safer drivers will benefit from that.

    The current system is awful and needs to be replaced.
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    Decent bill at first glance - two questions

    Why a singular age?

    Why is £300 a maximum quote
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    This looks good, but presentation wise I think 1(3) and 2(2) need rewording as they actually read like £300 and then £1000 are the maximum insurance quotes someone can have, whereas I assume they should mean that's the maximum deviation allowed from the 'normal' quote based on age and post code.

    I do like it, but just to throw a curved ball at it, doesn't this mean that insurance companies will just make quotes more expensive on other criteria such as years of no claims?
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    I like the idea behind the bill. But maybe it would be wise to allow the premiums to increase in relation to some form of relation. Making it stagnent could result in devalueing or over overvalued.

    Other thing is why £300 or £1000?
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    (Original post by Matthew_Lowson)
    Decent bill at first glance - two questions

    Why a singular age?

    Why is £300 a maximum quote
    When it comes to insurance companies, before they take your 'No claims Bonus' into account, they put a price based on bulk age grouping. For example 17-21 or 18-25 depending on what company it is. Taking the 18-21 into account, this would the highest in terms of quote for this section, lets say it is at £1,000 with no no claims bonus, now it is set at £300 maximum saving those people £700 on that section alone.

    As for singular age, if bulk age grouping is being used, people who are aged 21 are being quoted the same as a 17 year old, which doesn't seem right to me.
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    Excellent bill, aye. :yy:
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    (Original post by Afcwimbledon2)
    I like the idea behind the bill. But maybe it would be wise to allow the premiums to increase in relation to some form of relation. Making it stagnent could result in devalueing or over overvalued.

    Other thing is why £300 or £1000?
    Okay, i'l use myself as an example, where i live would be either 'E' or 'F' on the post code system. which means i would be paying way over £1,000 on that part of the quote alone. For the age group system, i'm 18, which means i'm being charged way over £300 pound here, probably about £2,000, taking into account i have no 'no clams bonus'. Instead of myself paying £3,000 here, i'd be paying £1,300 max.

    Just a rough example.
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    (Original post by Tactical Nuclear Penguin)
    This looks good, but presentation wise I think 1(3) and 2(2) need rewording as they actually read like £300 and then £1000 are the maximum insurance quotes someone can have, whereas I assume they should mean that's the maximum deviation allowed from the 'normal' quote based on age and post code.

    I do like it, but just to throw a curved ball at it, doesn't this mean that insurance companies will just make quotes more expensive on other criteria such as years of no claims?

    Hmmm, good point i'l have look

    I could add 'No Claims Bonus' must remain at the same fixed rate?, otherwise, for example, if you get through a year without having an accident etc, your insurance for the following yer must be lower, A.K.A, it can't be raised?
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    I would also like to mention to people that there are two grouping systems in the UK, one which consists of 1-20 and there is one which consists of 50 insurance groups, Should it be that everyone is made to change to the 1-15 or should it be 1-30 grouping, with the highest quote in the '1-15 grouping' being the highest in 1-30 grouping system...Just thought of it, as it would allow a slight difference between the huge number cars out there?
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    Equality in car insurance? you know that it should in unequal right? I mean there are some terrible women drivers out there and they deserve the high insurance costs. My insurance was only £600 for my 1 Series when I had it which thinking about it wasn't bad and I got a decent quote of £1k for a Porsche Boxster (although it is a girly car, piss poor in every way) but in the end insurance is meant to punish those that are terrible drivers and to force people to be safer drivers if they are paying a lot.

    Bringing the prices down under government demand is against the free market so this is just a travesty.
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    This will surely mean that either:
    a) Insurance companies will go bust or
    b) Insurance prices will rise for the safest drivers.

    If currently an average 18 year driver has a quote of £2000, then this will mean that their insurance will become quite a bit cheaper. Even if there is just 1000 18 year drivers on the books, then if the quote is reduced to £1500 due to the changes, then this means that the insurance company will receive £500,000 less revenue (25% less). Assuming that the number of claims remains the same, and that the companies don't have a profit margin of 25%, then all the other driver's quotes will have to increase to raise the extra £500,000.

    Tl:dr - you are trying to force cuts to high insurance prices for a particular group, which will result in premium raises for everyone else - generally the 'safer' drivers. If you want to reduce prices like this, you need to subsidise insurance prices to prevent everyone else paying more.
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    (Original post by tehFrance)
    Equality in car insurance? you know that it should in unequal right? I mean there are some terrible women drivers out there and they deserve the high insurance costs. My insurance was only £600 for my 1 Series when I had it which thinking about it wasn't bad and I got a decent quote of £1k for a Porsche Boxster (although it is a girly car, piss poor in every way) but in the end insurance is meant to punish those that are terrible drivers and to force people to be safer drivers if they are paying a lot.

    Bringing the prices down under government demand is against the free market so this is just a travesty.
    Well aren't you lucky for getting such good quotes ..I'd say i'm a fairly decent driver, only got 3 minors on my test. The only reason why i'm not getting quotes like you is because i'm being discriminated against because of where i live. I'm not being quoted 8,000 because i'm a terrible driver or because i'm new driver as iv'e seen friends who are also 18, get quotes for £800-£1500 because of the area they live in. Sure, being young plays it's part, but just because i live in an area with thieving C***'s Doesn't mean me and others who are similar should suffer high insurance.

    Also, for safety reasons, i could add a different 'Maximum' on areas of the quote for those who have had accidents...that should teach the bad drivers, eh?
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    (Original post by rmhumphries)
    This will surely mean that either:
    a) Insurance companies will go bust or
    b) Insurance prices will rise for the safest drivers.

    If currently an average 18 year driver has a quote of £2000
    £2,000 average...that would be the average before the type of car is taken into consideration.

    then this will mean that their insurance will become quite a bit cheaper. Even if there is just 1000 18 year drivers on the books, then if the quote is reduced to £1500 due to the changes, then this means that the insurance company will receive £500,000 less revenue (25% less). Assuming that the number of claims remains the same, and that the companies don't have a profit margin of 25%, then all the other driver's quotes will have to increase to raise the extra £500,000.

    Tl:dr - you are trying to force cuts to high insurance prices for a particular group, which will result in premium raises for everyone else - generally the 'safer' drivers. If you want to reduce prices like this, you need to subsidise insurance prices to prevent everyone else paying more.
    Your forgetting, that there are loads of people like myself who can drive but cannot afford insurance, surely if we could, insurance companies would be gaining more customers, which in return will make them more money? meaning premium raises won't happen? Not to mention even safe drivers could benefit from this, as safe drivers live in the 'F' section of the postcode system and they too could be at the higher end (16-20) of the Insurance grouping?...they could save quite a bit themselves.
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    (Original post by ConanAndrews)
    £2,000 average...that would be the average before the type of car is taken into consideration.



    Your forgetting, that there are loads of people like myself who can drive but cannot afford insurance, surely if we could, insurance companies would be gaining more customers, which in return will make them more money? meaning premium raises won't happen? Not to mention even safe drivers could benefit from this, as safe drivers live in the 'F' section of the postcode system and they too could be at the higher end (16-20) of the Insurance grouping?...they could save quite a bit themselves.
    I did just pick a figure out of the air - I imagine the actual figure for a new 18 year driver is actually higher.

    Yes, there would be more customers, but then it is likely there would be more accidents. It logically follows that the more people that there are driving (which will increase if the number of people insured increases), then the number of accidents will increase as well. Even if it doesn't increase exactly as a ratio, then for a significant decrease in premium per new driver (Which is what this bill is trying to do - a £50 decrease would be pointless), there still won't be enough to pay for the accident without raises elsewhere.

    If just having more drivers insured would be enough to cover the shortfall from lower premiums, the insurance companies would already do it - they want their profit to be as high as possible, and so if more drivers paying less would achieve that (or even if it meant a small decrease in profit in return for looking good) they would do it.

    Insurance prices suck, I have burned through a good amount of some inheritance money so I can afford insurance, but to significantly reduce premiums, the money needs to come from somewhere. The fact is, the insurance companies 'bet' you are going to give them more money than they pay out for you - and the system they have works to insure that most of the time they win. Capping premiums will mean they have to get back the money they pay out in big claims from other drivers.
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    (Original post by ConanAndrews)
    Well aren't you lucky for getting such good quotes ..I'd say i'm a fairly decent driver, only got 3 minors on my test. The only reason why i'm not getting quotes like you is because i'm being discriminated against because of where i live. I'm not being quoted 8,000 because i'm a terrible driver or because i'm new driver as iv'e seen friends who are also 18, get quotes for £800-£1500 because of the area they live in. Sure, being young plays it's part, but just because i live in an area with thieving C***'s Doesn't mean me and others who are similar should suffer high insurance.

    Also, for safety reasons, i could add a different 'Maximum' on areas of the quote for those who have had accidents...that should teach the bad drivers, eh?
    I don't buy this crap about area being an affect, my housemate pays more than I did for a worse car and she is a woman and thus should be getting better quotes compared to me on a licence from France and I have had multiple accidents in various cars (although never my 1 Series :lol:). Then there is the fact that both areas I used gave me the same quote my main place in London (high crime near nightclubs ) and my former place in the middle of nowhere with no crime whatsoever.

    I do not believe in the limiting of how much people should pay because you are envious of others that can afford car insurance, it is a poor reason to dictate premiums.
 
 
 
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