The Great Insurance Rort of 2022

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Forums › Finance and wealth management › The Great Insurance Rort of 2022

Wheelbarrow01

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#298560 28-Jun-2022 09:46

So, last year I paid a $608 premium to insure my VW Touareg for $40,800 agreed value.

I just got my renewal pack via email. This year the premium is $1117 for a much reduced "agreed" value of $32,463.

I have made no claims in the intervening time which might have negatively (or positively!) influenced the premium.

This is the same insurance company that I previously insured my Ranger through - that was insured for around $70,000 at the time and the premium was around $750 which was much more bang for buck.

My wife's premium for her Mazda 3 has also markedly risen this year. I just don't see how such crushing rises are justified. Time to shop around but I find it baffling that premuims continue to rise steeply every year while the total cover reduces significantly at the same time.

Who else is experiencing this right now? It can't just be me I'm sure....

The views expressed by me are not necessarily those of my employer Chorus NZ Ltd

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#2935178 28-Jun-2022 09:54

go incognito and get a new quote from the same company

Wheelbarrow01

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#2935183 28-Jun-2022 10:10

RobDickinson:

go incognito and get a new quote from the same company

Yes I did that this morning - it was about $50 cheaper for "Jim Jones" to insure my car for the same amount and with the same conditions, domiciled at my neighbour's address.

Interestingly, another insurance company that I left 3 years ago due to them being comparitively more expensive is now significantly cheaper - $868 for same cover and conditions.

I will continue my shop around - clearly prices are all over the place.

MikeB4

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#2935238 28-Jun-2022 10:16

AIG/State? They are increasing premiums by 35%. The government needs to go after these companies. The grocery sector has nothing on these rip off merchants.

thewabbit

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#2935245 28-Jun-2022 10:20

My renewal is coming up in about a week. A Subaru Imprezza STI, with an (unchanged) fixed price. Went down about $90 for the year (AMI). Needless to say I was shocked with that

Wheelbarrow01

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#2935250 28-Jun-2022 10:31

MikeB4: AIG/State? They are increasing premiums by 35%. The government needs to go after these companies. The grocery sector has nothing on these rip off merchants.

No - interestingly State is the company that quoted the lower amount tis morning - $868.

Inphinity

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#2935255 28-Jun-2022 10:36

Wheelbarrow01:

Time to shop around but I find it baffling that premuims continue to rise steeply every year while the total cover reduces significantly at the same time.

While I agree it's ridiculous it rises that much, do remember, a chunk of the premium is to insurance against damage you cause at-fault to other peoples vehicles or property, not just the value of your own car, which is only a portion of their overall cost risk assessment.

alasta

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#2935256 28-Jun-2022 10:47

I got a crazy increase for my car insurance from AMI a few years ago and had to go out to market. I got a much cheaper deal elsewhere. The same thing has just happened with my medical insurance - Southern Cross want a 27% increase but I can avoid the increase if I change to another provider.

I suspect that a lot of these companies are relying on a large number of customers being too lazy to churn.

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OldGeek

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#2935257 28-Jun-2022 10:47

trademeinsurance.co.nz (underwritten by Tower). I have 2 vehicles insured with them and premiums have not gone up despite claims.

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timmmay

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#2935259 28-Jun-2022 10:49

I shop around every year for car insurance. You can often get online only discounts and the insurers put up their prices at different times.

I suspect the high risk of natural disasters in NZ is the driver, plus maybe desire for increased profits.

Handsomedan

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#2935287 28-Jun-2022 11:50

I would have to assume that the increase in thefts of vehicles and those uninsured on our roads would have something to do with the increases, but it's hard to fathom how the insurers have such wildly differeing prices when the determining factors are all the same.

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Scott3

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#2935303 28-Jun-2022 12:15

Consider that the value of the insured car's doesn't have a proportionate impact on insurance costs. Was quite surprised when I insured a $40k carbon fiber bodied BMW a few years back, that it was well less than double the cost to insure a $4k corolla.

There are a few factors here.

Companies in the modern era tend to milk their "sticky" customers, while offering attractive deals to new customers. Often makes sense to keep jumping around to avoid getting ripped off.
Risk profile for insurers in NZ has shot up in the last few years. We seem to have had a higher number of earthquakes, extreme weather events. over the last decade. Both high profile stuff like the Napier & Westport floods. Even Auckland has had a few brief flood events, that trashed many car's: https://www.youtube.com/watch?v=EV6hXXeOaLY
Pandemic has had a serious impact on the collision repair industry. Much harder to get part's like new replacement bumpers these days due to supply chain issues. This adds costs to repairs.
Pandemic has had a big impact on car values (especially used) - Might not matter for agreed value policies, but replacing a lot of car's is much more expensive than it was two years ago.
I think insurance companies are getting a bunch of real world data on the cost to repair modern vehicles, and are revising their estimates upwards as a result (especially for stuff like Tesla).
More cars in the fleet increases odds of them crashing into each other.
I don't have hard data, but there seems to be more media coverage of vehicle crimes lately.

Only real ways to win as a consumer:

Shop around.
Consider greater self insurance (i.e. higher excess, or going for lesser coverage such as third party only, or third party fire an theft).
Owning less cars - With insurance being charged on a per car basis, those with many car's get ripped off.

sen8or

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#2935306 28-Jun-2022 12:24

alasta:

I got a crazy increase for my car insurance from AMI a few years ago and had to go out to market. I got a much cheaper deal elsewhere. The same thing has just happened with my medical insurance - Southern Cross want a 27% increase but I can avoid the increase if I change to another provider.

I suspect that a lot of these companies are relying on a large number of customers being too lazy to churn.

Be very wary of changing medical insurance providers, a condition or event covered under your current provider may not be covered by your new one (pre-existing condition) and your "savings" could be very costly......

Wheelbarrow01

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#2935312 28-Jun-2022 12:34

OldGeek:
trademeinsurance.co.nz (underwritten by Tower). I have 2 vehicles insured with them and premiums have not gone up despite claims.

I am currently with Tower. The quote from Trademe came in about $140 cheaper than my Tower renewal.

So far AMP is winning the battle, at $376 cheaper than Tower for exact same cover, agreed value, excess etc.

Next cheapest is State. Also have quotes from AA, Cove, Initio, AMI, Protecta. So far, none of them is as expensive as Tower - which is weird because Tower were the cheapest by some margin when I took the policy out 3 years ago. I guess Tower get people in the door with low prices but then wring every last dollar out of them through premium hikes and they just hope people don’t notice. Not the way to build customer loyalty IMO.

As painful as it can be, it’s well worth shopping around every year at renewal time. At least online quotes take some of the sting out of it. I remember the days when I had to spend hours on the phone to get quotes…

timmmay

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#2935318 28-Jun-2022 12:50

You need to read the policy wording to really compare policies.

Lias

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#2935384 28-Jun-2022 15:00

sen8or:

Be very wary of changing medical insurance providers, a condition or event covered under your current provider may not be covered by your new one (pre-existing condition) and your "savings" could be very costly......

Also worth noting that Southern Cross is a not-for-profit, unlike most of if not all of their competitors. I find it hard to believe their for profit commercial competitors can offer the same level of cover and pay-outs, undercut their prices and still make a profit. My money's on the level of cover or the ability to access pay-outs being lower than SC's.

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