QM talks about the insurance black box scam. Instead of it being a force for reduced premiums, they use it as an excuse for bumping up charges. Well, there’s a surprise…
I commented there that this is nothing new. Indeed, it made me look up this article from a decade ago.
It is always worth remembering that insurance companies are not charities – they are investing in this because they see a revenue opportunity. Oh, how simple it all could be – analysing a driver’s record and declaring his insurance void due to, say driving several hours without a break or breaking the speed limit – or, just hiking the premium.
Penned by none other than yours truly in my first ever blog post, written for the people over at Samizdata on their now defunct White Rose blog, a few months before I started this place. Prescient or what?
If they are using “black boxes” or mobile phone apps to show when people are exceeding the speed limit, it won’t be long before they discover a duty to pass this evidence to the Police.
I’ve never quite been able to make out how it can be legal for an insurance company to accept your premium, but then only tell you after you make a claim that you haven’t been covered at all. Oh sure, I get all the malarkey about how they cover themselves by asking the customer to inform them about things like previous convictions and modifications to the vehicle etc, etc, so that they can judge the level of premium accordingly, but being as they are perfectly capable of checking up (seemingly with lightning speed and great ease!) on these things after you’ve had an accident, why aren’t they obliged to check up on them beforehand so that they can inform the customer if they can’t give cover, i.e. before they receive payment? And if you’ve had a policy with an insurance company for X number of years, only to discover when making a claim that you weren’t covered at all, why aren’t they then obliged to give you back all of your previous years’ premiums, on the basis that they were taken for a service which, it turns out, they never offered you in the first place? Isn’t that some kind of fraud, or scam, or taking money in bad faith or something along those lines ….?
Which is why I only ever have insurance that is mandated – by law or my mortgage lender. All other risks I cover myself.
Swinton wanted to sell me helmet and leathers cover when I took out bike insurance with them along with legal expenses. They couldn’t understand why I was saying no. As I pointed out to them, uninsured losses are claimed against the third party in the event of a third party fault accident. If it’s my fault, I’ll accept the loss. They then asked about a replacement bike while the claim was going through. As I explained to them, if I am in a fit state to ride, I have another machine in the garage, which at that time, they were covering.
All of these extras are nothing more than a money making scam.
And they even scam you on this one, with many of them charging almost as much for third party insurance as a full comprehensive premium. Third-party only insurance (as opposed to TPFT) is often not offered at all and, apparently, is sometimes offered at a higher premium than other more comprehensive insurance. If that isn’t a scam, what is? They’re obviously relying on people assuming it would be the cheapest and not checking other options or providers.
I also wonder (perhaps paranoia?) if when “shopping around” for insurance with different options (e.g. estimated mileage per year) that they record the putative information and possibly use it against you. It is quite legitimate to find cheaper insurance for a lower estimated mileage, and therefore choose to do fewer miles, but you do wonder if they assume you’re actually lying and doing the highest mileage you’ve tried for a quote and charge you accordingly.
Its a very sinister creep indeed.
When money grabbing insurance companies become defacto tax collectors and agents of what is euphemistically called “nudge” then anyone with even the barest vestiges of self respect and regard for law should be very concerned INDEED.
It’s this minority report mentality. Until you have an accident you don’t cost them a penny but if they think you might then that apparently justifies this legalised theft.
And they wonder why there are so many uninsured cars around.