The promised rant about car insurance

Posted on August 26, 2010

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Beloved monkeyfans, I know that I’ve been neglecting you of late. I’ve got a load of half-written forensicky posts waiting in the ‘drafts’ folder but can’t seem to get any of them finished or up to the high standard that you’ve come to expect. I don’t know why my creative juices have turned crusty, but I suspect it’s partly because my current financial restrictions have forced me to cut down on the booze. Recession is hell.

Anyway. Recently I asked on Twitter whether anyone would be interested in reading a rant about car insurance. A few of you were foolish enough to say that you would, and so here it is. It’s long and ranty.

A couple of weeks ago the stars aligned themselves in the annual configuration that means it’s car insurance renewal time. I hate that time of year. It always catches me unawares, and forces me to spend a day in the weasels’ lair that is Insurance Land.

This is what's really going on at 'Go Compare' HQ. Click to embiggen.

Now don’t get me wrong, I understand that I need insurance for my car: third party in case I hit anyone else and fire ‘n’ theft in case the car spontaneously combusts  or is stolen by joyriders needing a sensible vehicle with carseats for the kids. But if you step back and look at the state of the industry today (I took a step back to get a better swing at the screen with a plastic lightsabre, but the effect was the same) it’s like a vision from Hieronymus Bosch.

The whole system is built into what I call the Rube Goldberg Model of Insurance Packages: for those who don’t know, a Rube Goldberg machine is a deliberately over-complicated humourous mechanical contraption of many parts, all of which have to be configured in a precise way for the machine to work: the boot kicks the skateboard which bumps into the ladder causing the pendulum to swing which catches the light that melts the ice that drips on the badger etc etc. You get the idea. With car insurance, you have to get a sliding scale of options into the right configuration if you want your egg cooked how you like it:

  • Annual premium: This is the basic sum that you see first. This is ostensibly the amount that you pay for the year.
  • Compulsory excess: the amount that you have to pay the insurer if you make a claim.
  • Voluntary excess: this is also what you pay if you have to make a claim, but this time you can choose the amount. If you choose a low number, your annual premium is higher than if you’d chosen a high number.
    Let’s just think about these ‘excesses’ for a moment. You take out insurance so that the financial cost of an incident is covered. Say your car is stolen and left for dead in a field by some spotty-faced ratboy: it’s a pain in the arse and can be upsetting and distressing, but the financial cost is covered by the insurance and that’s why you took out fire & theft coverage.  Unless, of course, you didn’t have a premonition of this incident when you were renewing your insurance, and chose low excesses. The basic quotes for my car were coming up with excesses that would leave me between £500 and £700 worse off in the event of a claim. Now, I have no interest in cars beyond a working stereo, safety features for the kids and comfy chairs.  My current car, according to Parker’s Guide, is worth about £3200. Chopping the excess off that is a big whack, which would have a big impact on what I could buy to replace my lost, insured car. So do I risk having to make a claim and go for the high excess/low premium or do I get a low excess and drive like a methed-up hillbilly for the year?

What they’re doing is reducing that part of it to a big gamble on your part. And as with casinos, the punter is at a distinct disadvantage when gambling with the professionals: insurance companies have decades worth of actuarial tables to work from, and have finely balanced their exposure to the risk that they take by insuring you. That’s not to say that there isn’t a risk for them, but that’s the business they’ve chosen to be in – if they didn’t want exposure to risk then they should have become junior test-strokers in a fluffy kitten factory. So on their side is years’ worth of research, statistics and clever maths and on your side is…you. A harassed, busy person who’s snatched a few hours to sort out car insurance on one of those god-forsaken comparison sites, all the time trying to remember from last year what all the weasel-words and subclauses meant, and ending up scaring the cat by swearing at the computer, with a splitting headache.

That’s never the end of it, either. You’ve also got to weigh up the windscreen cover (excess will apply!), legal cover (to stop you getting raped by your own insurance company, most often), personal injury cover and protection for your no-claims bonus. This bit confuses me greatly: your no claims bonus is a bonus you get for not making a claim, as I understand it. I can see the point in this – if you prove yourself to be a careful, lucky driver then you get money off your insurance in subsequent years. But no – you can pay to protect your NCB so that if you’re not lucky or careful, you can still be treated as if you were (on the face of it at least, I bet they take more note of the bit on the form that asks whether or not you’ve claimed in the last few years, which is seperate from the NCB bit). This strikes me as being fundamentally dishonest – like the defendant in a job I once had, who would only plead guilty if the judge promised him a non-custodial: that’s not how it works, dude. You either did it or you didn’t. You either haven’t made a claim, or you have.

Even to get to this stage, you’ve had to fill in pages and pages of forms online. You’ve handed over massive amount of personal data and a lot of the time you still get results that seem completely random – I compared a quote I’d got via a comparison site with a quote from the same insurer’s own website, giving exactly the same data, and the latter quote was three times the one I’d got previously. What the hell is going on there?

Last year I got to the final stage – buying the cover – and was waylaid for an hour. The final sum on the payment page with all the optional extras, all the little dangly bits, the sky-high APR for wanting to pay monthly, came to £10 a month more than the quote I thought I’d chosen. I went back over it a dozen times, I read every word carefully, I read it on screen and on paper, I created a new quote to do it all from the beginning, but I just couldn’t see where this extra tenner was coming from. Eventually, frustrated and angry, I phoned the insurer and said to the pleasant young man in the call centre, ‘I give up. You win. You’ve outfoxed the fox. Where’s the extra tenner coming from?’ He laughed and told me – I forget what it was, some spurious nonsense like cover for my socks if they got petrol splashed on them. He acknowledged that it was well hidden, told me how to take it off, and I paid and poured myself a medicinal pint of absinthe.

As I dunked a chocolate Hob-Nob in the green gloop though, I was annoyed and resentful. I’d been forced into spending hours of my day dealing with invisible and unaccountable people who deliberately obfuscate and connive to try to turn a profit. I know, big deal, that’s capitalism, Monkey – if you think Canada’s so great why don’t you just go and live there. But hang on, why the fuck should I have to deal with these people whose job it is to be vexatious to the spirit? Who are these people? Do they kiss their kids goodbye in the morning and whistle a merry tune as they go off to work, where they devise more ways to hide charges and headfuck people into a state of such utter, screaming annoyance that they just stick a pin at random into a list of policies, losing their hard-earned money in the process? Do they consider it a job well done when they come up with some new Möbius strip of a policy, that will leave some working stiff worse off in the event of his means of transport having a mishap?

If you ask me – and I’m amazed if you’ve read this far, let alone still have the capacity to ask questions – these people are yet another regiment in the army of profit-above-all-else. They stand alongside the people who somehow convince themselves that it’s OK to market shit at kids, who study how best to exploit the nag reflex in young children so that they pester their parents into buying them uninspiring crap that they’ll play with for a week before ending up in a landfill for 2000 years. At their other shoulder are the people who package nutrient-free chemical sludge as a ‘healthy option’ because it’s only got 5% fat, and the ones who spend millions destroying the self-confidence of women before selling them an emulsion of oil and water with a few dribbles of random sciency-sounding things in.

Are you one of these people? Do you know someone who is? Have a word with them! This isn’t just empty rhetoric, I’m serious – is this how they want to be remembered? Are they proud of what they do? A frustrated corporate drone from a marvellous 1970s sitcom was driven to drastic measures when he considered his likely epitaph: “Here lies Reginald Iolanthe Perrin. He didnt know the names of the trees and the flowers, but he knew the rhubarb crumble sales figures for Schleswig-Holstein.” Knowing the stats for puddings is a banal way to spend your best years, but at least it was relatively benign.

To get back to my original point,  I know that car insurance is a necessary evil. To be more precise, it’s a statutory evil – you’ve got to have 3rd party cover by law, and with good reason. Given this, wouldn’t it be fairer if an actuary from the Department of Transport set the premium for basic third party cover? I’m not a big-state monkey by a long stretch, but one of the functions of even the most shrunken state is to provide protection to its citizens. In these times, one of the most serious threats of predation that a person faces is not from hoodies or drug gangs or immigrants or swine flu, but the constant, coordinated, obscenely well-funded parasitism of corporate greed. The insurance industry is just one tendril of this beast.

Here endeth today’s lesson.