Insurance claims – a look at the break-down between the sexes

The age-old argument of which sex is the better driver will no doubt rumble on for many years to come, but some interesting statistics have been brought to light by MoneySuperMarket which has looked at some 11 million insurance quotes.

It seems that although men have fewer accidents than women, they cost the insurance industry a lot more than women. There is an average difference of £416 per “at-fault”, claim with the men’s average coming in at £3,187 and the women’s at £2,771.

As far as the big money is concerned, 5% of men’s claims notch up sums in excess of £10,000, whilst only 3% of women’s hit that level. At the opposite end of the scale, 37% of claims made by women are under £1,000 whilst 34% of claims made by men are more than £2,000.

According to Kevin Pratt of MoneySuperMarket, one interpretation of the statistic regarding women’s claims under a thousand pounds could be that the fairer sex take more pride in the appearance of their cars, leading them to have minor bumps and scratches put right after an accident.

One thing that leaves little room for argument is the fact that recently qualified drivers are most at risk of having an accident, with one in four “at-fault” claims being made by a driver with under five years’ experience behind the wheel compared to one in six with more than 10 years’ experience.

87% of all car insurance claims arise as a result of an accident with only 2.4% coming about because of theft. Other reasons include windscreen damage and vandalism.

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New drivers lose their licence after six points

Statistics show just how many newly qualified drivers thumb their noses at the concept of safe driving.

Strict laws to cut the number of deaths of inexperienced drivers were brought in in 1995, leading to an automatic ban for those who totted up six penalty points or more within the first two years of them passing their test.

The DVLA recently revealed that in the last four years almost 50,000 new drivers lost their licences. Around 70% of these were young men under the age of 25, while 80% were men of any age and even the over 70s were represented.

Penalty points cover a range of offences:

  • Speeding – 3 or 6 points
  • Using a hand-held mobile – 3 points
  • Ignoring a red light – 3 points
  • Racing another vehicle – 3 to 11 points
  • Driving without insurance – 6 to 8 points
  • Drink-driving – 10 points

For further information click here.

Patrick McLoughlin, the Transport Secretary, is currently considering other measures to cut the death toll on the roads. These include measures such as:

  • Imposing a night-time curfew for inexperienced drivers (probably between 10pm and 5am when accidents are more likely to happen)
  • Limiting the number of passengers they can carry to cut down on distractions or the temptation to speed or drive dangerously in a misguided attempt at being seen as “cool”
  • Making the displaying of P-plates (denoting “probation”) compulsory for a set period after passing the test
  • Imposing different drink-driving limits

It is thought that these measures could reduce deaths and injuries on the road by almost 4,500 a year.

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‘Morning-after’ drink-driving arrests have risen

The vast majority of drivers take a responsible attitude to drink-driving and either opt for a taxi after a night out or make sure that the designated driver sticks to soft drinks. However, how many of us have staggered home in the small hours of the morning somewhat worse for wear, only to get behind the wheel a few hours later and drive to work?

With the festive season almost upon us, some worrying figures have been reported that show arrests for “morning-after” drink-driving rose by 4% from 2011 to 2012.

Insurer LV has also surveyed a cross-section of drivers and it seems that we are staggeringly ignorant about the time it takes for alcohol to leave the body and the law surrounding “morning-after” driving.

  • 46% of those surveyed did not have a clue as to how long it takes for us to sober up and become fit to drive after a night out
  • 37% said that driving the following morning was “unavoidable”
  • 26% felt it was acceptable to drive because they weren’t going far
  • 7% thought it was OK because they were not driving on motorways
  • 13% thought there was some leeway and that they would not end up in trouble because they were not much over the limit

According to advice from the NHS, it takes one hour for one unit of alcohol to leave the body. However, this can be inaccurate, depending on a variety of factors such as age, weight, gender, the state of your liver and what you have eaten. Contrary to popular belief, coffee and cold showers do not make a jot of difference.

Drivers convicted of drink-driving (whether five minutes after leaving the pub or the next day) can be fined up to £5000, banned from driving for at least 12 months or be given a custodial sentence.

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Don’t be a victim of ghost broking

Ghost brokers have been hitting the headlines recently with twenty-seven fraudsters arrested in a series of dawn raids last month and two jailed for their part in Britain’s biggest insurance scam. The Insurance Fraud Enforcement Department is tackling the problem head-on but what can you as a driver do to make sure you have not been duped?

First of all, young drivers who are probably the group most at risk need to realise that insuring a car when you are young and inexperienced is expensive. If a deal looks too good to be true then alarm bells should be ringing. The same alarm bells should also ring if you are asked to pay by cash or if all communications are by way of free internet messaging on mobiles or Blackberries. Most genuine brokers will have facilities to let you pay by credit card.

If you use a broker, make sure that they are reputable by checking that they are a member of the British Insurance Brokers’ Association.

You can also ensure that your car appears on the national database of insured vehicles. Simply click here to check.

Just because your car appears on the database does not necessarily mean that all is well. If you have doubts that your policy is genuine, phone the insurance company mentioned on your paperwork and make sure that they have all the correct details. Bear in mind that some ghost brokers take out a genuine policy with your correct name and vehicle registration but they may have falsified details such as your driving experience to reduce costs.

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Young drivers warned of ‘ghost’ brokers

There is a well-known saying that if something sounds too good to be true it probably is and nowhere is this more pertinent than in the world of motor insurance.

The shadowy world of so-called “ghost broking” has recently hit the headlines and it seems that those most at risk of being duped are young drivers who can normally expect to pay the highest premiums. Ghost brokers are crooks who pretend to act as middlemen who can cut the costs of insurance. Favourite hunting grounds for these fraudsters include websites such as Gumtree as well as university noticeboards and other student haunts.

Ghost brokers operate in three ways. Perhaps the least sophisticated is where the broker creates a fake document based on a genuine policy. The driver can easily check with the Motor Insurance Database to see whether they are in fact covered. The second method involves the ghost broker taking out a genuine policy and having the documents sent to their own address, ready to pass to the client. Unbeknown to the customer (who may by then have checked the database to their satisfaction) the broker later cancels the insurance and keeps the monies refunded. The driver has a genuine certificate of insurance but no cover. The third way is for the broker to take out a genuine policy but to give incorrect information to reduce the premium e.g. they may make the driver out to be older and more experienced than they really are.

Whichever method is adopted, the duped driver ends up out of pocket and could even get a criminal record for driving without insurance.

Last month two ghost brokers were jailed after pocketing half a million pounds from some six hundred unsuspecting drivers. Young people are being warned to exercise caution if faced with a bargain!

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Beware of increasing your excess

Most insurance policies have a minimum excess which means that when we make a claim we have to pay a certain amount ourselves. However, it has become the norm that we are able to increase this excess voluntarily when taking out a policy, often up to a fairly high level.

When trying to reduce our insurance premium it is often tempting to do this, not because we have a perverse desire to bail out the insurance companies but because the higher the excess, the lower our premium will be. Indeed, according to data provided by Sainsbury’s Bank over 7 million of us have done this over the last three years when taking out either motor or home insurance. The average person who opts for this way of reducing their premium increases their excess by £327 which can mean significant savings in premiums.

However, how many of us stop to consider how this will impact us if we have to make a claim? Is the saving on the premium worth the risk of facing a hefty bill? Will the increased excess leave us in dire straits financially, having to dip into savings or borrow from friends or family? If the excess means that we are unlikely to make a claim, will we be comfortable with having to sort out the practicalities ourselves rather than placing it in the hands of our insurers? Finally, are there other less potentially costly ways of saving money such as shopping around for insurance?

13% of those who have increased their excess end up in a situation where their insurance would cover a claim but a third of them decide against claiming because of the excess.

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Whiplash claims cost industry £2 billion a year

We often read in the press that part of the reason for drivers’ insurance premiums soaring is the rise in the number of personal injury claims for whiplash injuries.

This is said to have added £90 to each driver’s motor insurance premium. 1,500 whiplash claims are made each day according to the industry and this costs insurers a jaw dropping £2 billion a year.

The strange thing is that despite the increase in the number of these claims being made in the last seven years, the number of accidents resulting in personal injury has actually gone down. It is this phenomenon that has led to press reports that Britain has become the Whiplash Capital of the World.

Earlier this year, the Commons Transport Committee was tasked with finding whether the industry’s claims of huge numbers of fraudulent whiplash claims were correct, whether new panels of doctors should be introduced to see if claims are genuine and whether the limit for the Small Claims Court should be increased so that insurance companies could settle more cases this way.

The Committee’s findings did not result in good news for the insurance industry:

  • There was no proof of a rise in fraudulent claims; indeed there was a 60,000 decrease in 2012.
  • Doctors have pointed out that since x-rays and scans do not detect whiplash injuries there would be little point in having new medical panels.
  • The Small Claims limit should not be changed as this would result in genuine claimants finding it hard to represent themselves.

The insurance industry has been told by the Commons Select Committee to “get their house in order”.

To see the full report click here.

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Cost is the biggest factor for drivers choosing car insurance

Paying for motor insurance is a major outlay and a significant part of the running costs of a car, so it should perhaps come as no surprise that many motorists are swayed by cost alone when choosing a policy.

Recent research carried out by comparison website, Gocompare.com, revealed that 75% of motorists choose their insurance cover based on the cost of the product; the quality of cover came a poor second with only 51% of drivers saying that this was an important factor. Should the other 49% of drivers ever find that they need legal cover or a courtesy car, both of which are frequently excluded as standard, they may of course wish that they had taken quality into account.

Next on the list came the insurer’s reputation, particularly their perceived reliability in paying out for a claim, with just under 1 in 3 drivers citing both these concerns as influencing their choice.

28% of drivers were swayed by being able to pay the premium in instalments which, given the high cost of insuring a car especially for young (and often hard-up) drivers, is hardly surprising. However, many insurers charge a fee for this sort of arrangement so it is always worth working out exactly how much this is costing you.

Close behind (21%) was the idea of something for nothing e.g. 12 months cover for the price of 11 months or a discount for a second car. Whilst this may make financial sense it is somewhat worrying to find that some drivers are even swayed by a free gift!

Other “pull” factors included recommendations by friends and family (12%) or insurance brokers (4%), specialist providers e.g. for classic cars (5%), whilst 2% of motorists are a marketer’s dream and are influenced by the advertising!

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One in two hundred drivers caught without insurance

We all know how costly it is for young drivers to obtain motor insurance and historically it has been much worse for young men. It seems, however, that some drivers are getting round this problem by simply driving without insurance.

A staggering 226,803 drivers in the UK have been caught driving uninsured and have received points on their licence. This may of course be the mere tip of the iceberg since many more could be doing it but have not yet been caught.

The figures from the DVLA, obtained under a Freedom of Information request made by the Institute of Advanced Motorists, reveal some interesting statistics:

  • Overall 1 in 200 motorists with full and provisional licences have points for driving uninsured.
  • This figure rises to 1 in 100 of motorists up to the age of 35.
  • In the under 25 age group there are four times as many men as women with points for driving uninsured.
  • Least likely to be driving uninsured are the over 65 age group (only 0.06%).

Tempting though it may be for some drivers to “opt out” of insuring their vehicle it can end up costing them dearly: not only could they end up with six points on their licence and have to pay a fine but, if they are involved in an accident, they could also receive a conviction and have to pay a hefty bill in liability. They may also be uninsurable in future.

As always, this is something which impacts on the law-abiding drivers, who pay on average an extra £70 a year on their premiums to go towards covering the £500 million a year cost to the insurance industry.

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“Flash for cash” cases increasing

In recent years “crash for cash” scams have hit the headlines, with crooks deliberately causing collisions to make fraudulent insurance claims. In one tragic incident in 2011 a young woman was killed and the three perpetrators received a prison sentence totalling 30 years.

The latest tactic has been dubbed “flash for cash” and involves incidents where one driver flashes their headlights at another, to let them out at a junction and then drives into them to cause an accident.

These scams are not only highly dangerous but costly too. It costs the insurance industry a staggering £1.7 million a day in false claims for personal injury, loss of earnings, recovery and repairs, replacement vehicle hire and so the list goes on. These costs of course are passed on to the innocent motorist at a rate of between £50 and £100 a year on insurance premiums.

The “flash for cash” criminals (often working as part of a gang) are deliberately targeting vulnerable motorists such as young women on their own and mothers on the school run, in the knowledge that they are less likely to get into an altercation at the roadside.

According to the Highway Code drivers should flash their headlights purely to alert other road users to their presence but it is often done as a courtesy to others to allow them out at a junction. Police are warning drivers that this is definitely a case where they should not assume anything and use their own judgment as to whether or not it is safe to proceed.

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