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Ribenapigeon
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PostPosted: 12:49 - 01 Apr 2015    Post subject: Government as insurance provider? Reply with quote
Somebody recently told me some countries the state acts as vehicle insurer. How would this work? Could it be a better way of doing vehicle insurance?
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Triton Thrasher
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PostPosted: 12:52 - 01 Apr 2015    Post subject: Reply with quote
It would be more inefficient and costly than you can imagine.
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Suntan Sid
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PostPosted: 12:57 - 01 Apr 2015    Post subject: Reply with quote
AIUI, where this happens the state provides third party only insurance, as part of road tax, it's up to the individual rider/driver/owner if they want to upgrade to fire/theft/fully comp as well.
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Ste
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PostPosted: 12:58 - 01 Apr 2015    Post subject: Reply with quote
I'm guessing you're making reference to where third party insurance is included in fuel duty?
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Ribenapigeon
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PostPosted: 13:05 - 01 Apr 2015    Post subject: Reply with quote
The person who told me didn't mention details. Insurance seems to be such a ripp-off business I was wondering if it would better for cars and bikes to be insured by the state. After all the state has massive bargaining power to weild with under writers. Presumably the state could even underwrite through some kind of bond issue?
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Dalemac
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PostPosted: 13:17 - 01 Apr 2015    Post subject: Reply with quote
Boozehawk wrote:
The person who told me didn't mention details. Insurance seems to be such a ripp-off business I was wondering if it would better for cars and bikes to be insured by the state. After all the state has massive bargaining power to weild with under writers. Presumably the state could even underwrite through some kind of bond issue?


We have a Tory government who have already privatised the Royal Mail and are working on doing the same to the NHS and police force.

Are you actually being serious? All the government wants to do is award contracts and pass on the blame.
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MarJay
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PostPosted: 13:41 - 01 Apr 2015    Post subject: Reply with quote
If you want to live in a leftie commie risk averse society where riding a motorcycle is considered too high a risk, and therefore motorcycle insurance is deemed illegal and therefore riding motorcycles on the road is illegal, then sure we could do it.
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tatters
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PostPosted: 13:54 - 01 Apr 2015    Post subject: Re: Government as insurance provider? Reply with quote
Quote:
leftie commie risk averse society where riding a motorcycle is considered too high a risk


We have this in the province of Saskatchewan, Canada where a lot of industry's and services are province (state) owned.

SGI (Saskatchewan government insurance), Its a complete rip off and there nothing you can do when they hike up the rates as they are the only vehicle licence/insurance provider its a government ran cartel that hates motorcycles. For example to insure a motorcycle over 400cc your looking at a annual rate of between $2000-3500 no matter what you age or experience, you can insure monthly with a added admin fee but its still a hell of a lot of money.


For me to insure my YZF1000 in the UK costs me £100 per year, Same quote with SGI is £1900. Thumbs Down
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Ribenapigeon
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PostPosted: 14:00 - 01 Apr 2015    Post subject: Re: Government as insurance provider? Reply with quote
tatters wrote:
Quote:
leftie commie risk averse society where riding a motorcycle is considered too high a risk


We have this in the province of Saskatchewan, Canada where a lot of industry's and services are province (state) owned.

SGI (Saskatchewan government insurance), Its a complete rip off and there nothing you can do when they hike up the rates as they are the only vehicle licence/insurance provider its a government ran cartel that hates motorcycles. For example to insure a motorcycle over 400cc your looking at a annual rate of between $2000-3500 no matter what you age or experience, you can insure monthly with a added admin fee but its still a hell of a lot of money.


For me to insure my YZF1000 in the UK costs me £100 per year, Same quote with SGI is £1900. Thumbs Down


What happens if you make a claim? One of the things got me thinking about this was a BCF member who's bike was stolen then his quotes after that were as much as a bike was worth. Practically making insurance pointless.
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tatters
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PostPosted: 14:14 - 01 Apr 2015    Post subject: Re: Government as insurance provider? Reply with quote
Boozehawk wrote:

What happens if you make a claim? One of the things got me thinking about this was a BCF member who's bike was stolen then his quotes after that were as much as a bike was worth. Practically making insurance pointless.



Your rates go up, you can also lose your safety rating if you were at fault in a accident which is like a NCB but gives very little of a discount. They act like a normal private insurance company in most ways but with added government incompetence, For some reason they always seem to try and have vehicles repaired even though most of the time its not economically worth it.

My sister-in-laws early 90's ford mustang was stolen by Indians and crashed into a ditch, at the time the car was only worth around $3-4k but SGI spend almost $9k having the damage repaired when it would of been better off just paying out the market value.
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Last edited by tatters on 14:17 - 01 Apr 2015; edited 2 times in total
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Suntan Sid
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PostPosted: 14:15 - 01 Apr 2015    Post subject: Reply with quote
Ste wrote:
I'm guessing you're making reference to where third party insurance is included in fuel duty?


What ev's!
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Ribenapigeon
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PostPosted: 14:51 - 01 Apr 2015    Post subject: Re: Government as insurance provider? Reply with quote
tatters wrote:
Boozehawk wrote:

What happens if you make a claim? One of the things got me thinking about this was a BCF member who's bike was stolen then his quotes after that were as much as a bike was worth. Practically making insurance pointless.



Your rates go up, you can also lose your safety rating if you were at fault in a accident which is like a NCB but gives very little of a discount. They act like a normal private insurance company in most ways but with added government incompetence, For some reason they always seem to try and have vehicles repaired even though most of the time its not economically worth it.

My sister-in-laws early 90's ford mustang was stolen by Indians and crashed into a ditch, at the time the car was only worth around $3-4k but SGI spend almost $9k having the damage repaired when it would of been better off just paying out the market value.


Isn't just a huge vote winner in elections to offer to scrap the system then?
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tatters
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PostPosted: 15:06 - 01 Apr 2015    Post subject: Re: Government as insurance provider? Reply with quote
Boozehawk wrote:

Isn't just a huge vote winner in elections to offer to scrap the system then?



Would never happen with the current provincial population which is sitting around the 1 million mark, too few people for private company's to be competitive, they would need to privatize motor insurance nationally and that's unlikely to ever happen.
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Teflon-Mike
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PostPosted: 15:13 - 01 Apr 2015    Post subject: Re: Government as insurance provider? Reply with quote
Boozehawk wrote:
Somebody recently told me some countries the state acts as vehicle insurer. How would this work? Could it be a better way of doing vehicle insurance?


We already have the option... sort of..

Road Traffic Act 1991 wrote:
Exception from requirement of third-party insurance.

In subsection (1) (which removes the requirement for third-party insurance or security where £15,000 is kept deposited with the Accountant General of the Supreme Court) for “£15,000” there shall be substituted “ £500,000 ”.


The amount of 'bond' was significantly raised by the 1991 RTA, because it hadn't been revised for about thirty years; and the value of bond needed had fallen so low, little more then the price of a fully loaded Golf GTi; the loop-hole was being exploited a little, by otherwise insurable drivers, where the bond was actually cheaper than a 3rd party premium!

As I understand it; you place the Bond, and the government stand guarantor against any 3rd party liability, and for as long as you leave the bond on deposit. It doesn't earn any interest, but as long as you don't have an accident, you can get your money back whenever you like. If any-one claims against you though; you loose the lot, even if the claims only for a few hundred quid.

Wording also provided the 'cover' to any vehicle owned by the bond placer, irrespective of who might be driving that vehicle... so one bond could cover a whole LOT of drivers and a whole lot of cars!

Meanwhile, Around 1993, the Norwich Union had approx 95% market share of the UK Motorcycle Insurance business, when they decided to stop offering new polices.

They almost killed UK Biking at a stroke... as other insurers 're-evaluated' their position compared to NU, and either followed suit or hiked premiums, enormously.

Was suggested at the time, (by the men in big glasses) that motor-insurance was only marginally 'profitable' to start with, and to many insurers it was almost a loss leader to get other business, or to get revenue from selling 'extras' like the credit to pay for the annual policy, while motorcycle insurance was particularly 'unprofitable', due to low vehicle values but high potential liabilities, and high claims risks.

State-Backed insurance schemes, as other countries that have them, were suggested then, as a 'model' for a UK system if commercial insurance brokers failed to plug the gap left by the NU.

I believe, that Major's government gave the men in big glasses a "jolly good talking to", though, and the NU back-tracked a bit on its original position to stop issuing new motorcycle policies; and limited that to merely not offering 'first' policies to riders under 30, and other insurers were 'encouraged' to get into the market; and doing more 'sensible' risk assessment than NU had done, leading to voluntary excesses and more caveots, like separate 'pillion cover' becoming more common place...

So based on that, I doubt that HMGov't are likely to be keen to jump in on the act now, and take business off their buddies in big glasses, unless there is a real crisis, and the country is going to grind to a halt, with every one sticking their cars on SORN, to avoid DVLA payola 'penalty charges' for owning an uninsured vehicle, 'cos the brokers wont give any-one a policy..
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c-m
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PostPosted: 16:05 - 01 Apr 2015    Post subject: Reply with quote
Just try getting a green card from UK insurer on a motorcycle policy. It's like pulling teeth. LV and Aviva are the only ones that will consider it and Aviva is scared of what's happening in Tunisia so won't insure for Morocco.

My cross channel friends that I'll be travelling get the green cards without any hassle and in most cases without additional fee.
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Alpineandy
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PostPosted: 16:18 - 01 Apr 2015    Post subject: Reply with quote
Boozehawk wrote:
Insurance seems to be such a ripp-off business


It's not a great system but would only really be a 'rip-off' if the insurance companies made much money out of it. Generally they don't. The comparison sites make good money, insurance brokers usually make very little for the time (& FSA compliance drivel) involved , Repair shops do quite well but insurance companies 'motor' book is usually a tiny percentage profit. If Insurance companies relied on the 'Motor' profit only they'd invest the money in a different business.

As for having a government scheme, have you dealt with the DVLA recently? and you really think they could do a better job then it is now?

PS I am involved in a 'specialist side' of the business but nothing to do with household, pensions or motor cover.
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Polarbear
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PostPosted: 16:18 - 01 Apr 2015    Post subject: Reply with quote
c-m wrote:
Just try getting a green card from UK insurer on a motorcycle policy. It's like pulling teeth. LV and Aviva are the only ones that will consider it and Aviva is scared of what's happening in Tunisia so won't insure for Morocco.

My cross channel friends that I'll be travelling get the green cards without any hassle and in most cases without additional fee.


Not had a green card for years. I've been told they aren't needed and been stopped and checked. Never had any problem.
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Alpineandy
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PostPosted: 16:24 - 01 Apr 2015    Post subject: Re: Government as insurance provider? Reply with quote
Teflon-Mike wrote:

We already have the option... sort of..

Road Traffic Act 1991 wrote:
Exception from requirement of third-party insurance.

In subsection (1) (which removes the requirement for third-party insurance or security where £15,000 is kept deposited with the Accountant General of the Supreme Court) for “£15,000” there shall be substituted “ £500,000 ”.




If you don't have 500k spare cash sitting in your bank to do this but have sufficient assets then you could go to a Bank and get them to issue a bond/letter of credit which you can then lodge, but the cost from the bank would make you appreciate how cheap insurance actually is, and if it all goes wrong then the bank would take your assets.
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Triton Thrasher
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PostPosted: 17:14 - 01 Apr 2015    Post subject: Re: Government as insurance provider? Reply with quote
Alpineandy wrote:

If you don't have 500k spare cash sitting in your bank to do this but have sufficient assets then you could go to a Bank and get them to issue a bond/letter of credit which you can then lodge, but the cost from the bank would make you appreciate how cheap insurance actually is, and if it all goes wrong then the bank would take your assets.


Yeah but when the cops ask for your insurance, you can sneeringly say you don't need any. That's worth something.
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Alpineandy
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PostPosted: 17:21 - 01 Apr 2015    Post subject: Re: Government as insurance provider? Reply with quote
Triton Thrasher wrote:
Yeah but when the cops ask for your insurance, you can sneeringly say you don't need any. That's worth something.

Nice idea but I'm pretty certain that you'd be given some form of document by the authorities and it would be a legal requirement to carry it, whilst the cop wouldn't know the difference between the doc and a cover-note.
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Triton Thrasher
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PostPosted: 17:31 - 01 Apr 2015    Post subject: Re: Government as insurance provider? Reply with quote
Alpineandy wrote:
Triton Thrasher wrote:
Yeah but when the cops ask for your insurance, you can sneeringly say you don't need any. That's worth something.

Nice idea but I'm pretty certain that you'd be given some form of document by the authorities and it would be a legal requirement to carry it, whilst the cop wouldn't know the difference between the doc and a cover-note.


OK, I'll continue to just hoof them in the balls and wheelie over the roof of their squad-cage.
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Robby
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PostPosted: 19:35 - 01 Apr 2015    Post subject: Reply with quote
Thing is, insurance isn't a rip-off business. It's a large, competitive business with low margins.

If you're young it's very expensive - at 18 year old could expect to pay £2-4k to insure a small hatchback for a year. This is because said 18 year old is likely to have a crash with a payout cost (vehicle, injuries, legal, admin) of 1.8-3.6k. Or to put it in a more real world scenario, out of 100 18 year old drivers, the overall payout on claims in a year is going to be 180-360k. It isn't hard to get up to that figure. A few broken bones, a few written off cars, many hours of legal costs.

My bike insurance is £100 with a cheap insurer with crap customer service and awful admin charges. I could pay £300 to go to a decent company and get a decent service. If insurance was a Govt run industry, I would pay £300 for crap service.
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Kickstart
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PostPosted: 23:15 - 01 Apr 2015    Post subject: Reply with quote
Hi

They had this system in Victoria, Australia, when we were there (assume they still do).

It did make real insurance (ie, fully comp cover) dirt cheap. The insurance was included in the cost of rego (ie, their equivalent of VED). This was hideously expensive compared to UK road tax. Combined with the cost of insurance it probably worked out roughly the same price for someone of around 30 as UK combined tax and insurance.

Down side was that having a 2nd bike insured in the UK can cost a nominal amount extra. Over there no discount for a 2nd vehicle.

All the best

K
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Alpineandy
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PostPosted: 23:43 - 01 Apr 2015    Post subject: Reply with quote
Robby wrote:
the overall payout on claims in a year is going to be 180-360k. It isn't hard to get up to that figure. A few broken bones, a few written off cars, many hours of legal costs.


Exactly.

One of the downsides of making ultra-safe NCAP cars (in the event of an accident) is that it only takes a relatively tiny knock to ripple the structure (not just the outer panels) which means the car is too expensive to repair = a write-off. A 3-series BMW is a lot of money and can be written off by a knock that would have seen a BMW 2002 (type not year, look it up!) as a 'medium' repair job. Of course a slightly bigger accident would have resulted in the 2002 drive being seriously injured+ but they took a small knock much better.

How many times have you seen a 'youf' driving like an idiot and known that he'd have an accident, well if that's running down the side of 3 cars that equals a lot of insurance pay out.

I know I drove like an idiot 25+ years ago but there were half the number of cars on the road and the quality of the drivers was double what it is now for the majority of them. Cars are too safe and easy to drive now, so half the drivers are thinking about other things and driving the actual car is about No3 on the priority list. That's one of the reasons a bike is so good for me as I have to concentrate on it and nothing else. Rant over!.... probably...
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sickpup
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PostPosted: 23:53 - 01 Apr 2015    Post subject: Re: Government as insurance provider? Reply with quote
Teflon-Mike wrote:

Road Traffic Act 1991 wrote:
Exception from requirement of third-party insurance.

In subsection (1) (which removes the requirement for third-party insurance or security where £15,000 is kept deposited with the Accountant General of the Supreme Court) for “£15,000” there shall be substituted “ £500,000 ”.


The amount of 'bond' was significantly raised by the 1991 RTA, because it hadn't been revised for about thirty years; and the value of bond needed had fallen so low, little more then the price of a fully loaded Golf GTi; the loop-hole was being exploited a little, by otherwise insurable drivers, where the bond was actually cheaper than a 3rd party premium!

As I understand it; you place the Bond, and the government stand guarantor against any 3rd party liability, and for as long as you leave the bond on deposit. It doesn't earn any interest, but as long as you don't have an accident, you can get your money back whenever you like. If any-one claims against you though; you loose the lot, even if the claims only for a few hundred quid.

Wording also provided the 'cover' to any vehicle owned by the bond placer, irrespective of who might be driving that vehicle... so one bond could cover a whole LOT of drivers and a whole lot of cars!


Another subject you know little about.

You place the Bond and any damages come out of the Bond which you are required to immediately top up. You do not lose the total Bond if someone makes and wins a claim only the amount of the claim. In fact what generally happened was that the Company under Bond paid out the claim in cash rather than from the Bond. The Bond after all only being a guarantee that you would pay any claim.

I find it highly unlikely the Bond system was being exploited, apart from anything the set up and running required a law firm and if the Bond doesn't cover the cost of a claim the further amount also came out of your pocket and you had to replace the Bond.

I have even been taken to court for no insurance under this system as the Police officer didn't know what a C-note was. The company I worked for had over 4000 vehicles covered by a single Bond note, that was the point of the system.
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