Road User Charging

[Bper]

1 hour ago, Haliotis said:

I don’t think Pay-by-Mile would make any difference to car insurance policies - we already give an estimated annual. Mileage when we take out a car insurance policy, and that would most likely remain as this is one of the parameters when setting the premium.

Messing around with home and contents insurance by the government, in order to support dwindling revenue from car tax charges, could cause problems for the government.

As far as pay-by-mile charging is concerned, this is only one of the ‘think-tank’ proposals - last year the government stated that they had no plans to move away from the current method of applying VED.

I think for many people affected by the cost of Pay-Per-Mile then the estimated milage given to insurance companies will become an issue. They may not be able to even give an estimate as it could be a question of only using the car for essential travel.

If the car is going to be used less often then the risk of potential accidents reduces. Less risk then less reason to charge higher premiums. 

Insurance markets will have to adapt to meet the changing needs. Shortfall in profits will be offset by additional costs in other types of insurance policies.

The think- tank proposals have looked at how ULEZ has raised significant revenue through charges and fines and see Pay-Per-Mile as the next logical step to meet the losses of VED.

As for the government stating any plans not to do something is like Sadiq Khan saying London as never been more safer and London underground has clean air.

[Primus1]

Why do I get the image of thousands of Londoners falling to their knees and shouting KHAAAAANNNN, 

 

[Haliotis]

Hi, Bob.  Less use of the car meaning reduced risks of accidents should be used with caution.  For someone who drives huge distances on a daily basis, a substantial reduction in miles could lower the risk.  The danger comes when a driver spends so little time behind the wheel that he/she could easily lose some ability in the necessary quick response  of alertness and reaction which are essential for road safety.

For example, although well retired, I never make a point of avoiding peak periods of heavy traffic.  One cannot be certain that at some point there will not come an absolute necessity to drive in heavy traffic, and a prolonged avoidance of this can easily result in an elderly driver losing the ability to be safe in heavy traffic.

[Cyker]

Absolutely agree - I'd argue you can't use mileage as an assessment of risk as it balances out: While the argument for driving more miles being higher risk is obvious, what's not taken into account is that people who drive more also have more 'live' experience, or however you'd describe it.

This was most stark after lockdown - You could really tell who had been driving and who hadn't, as the ones who hadn't showed a marked reduction in judgement and confidence, and were almost like advanced learners.

 

[Haliotis]

18 hours ago, Cyker said:

Absolutely agree - I'd argue you can't use mileage as an assessment of risk as it balances out: While the argument for driving more miles being higher risk is obvious, what's not taken into account is that people who drive more also have more 'live' experience, or however you'd describe it.

This was most stark after lockdown - You could really tell who had been driving and who hadn't, as the ones who hadn't showed a marked reduction in judgement and confidence, and were almost like advanced learners.

 

Completely agree.  The insurances companies mileage assessment is for simplicity and flawed.  Perhaps they just consider that the higher one’s mileage, the more idiots you meet on the roads?

When I queried my premium renewal last November, the insurer’s agent asked me how long I had been driving (the proposals usually stop at “25 years and over”).   When I told him 70 years, he knocked a further £9 off my premium.  This is the first time I have received a deduction for actual years I have held a licence.

[Bper]

I agree with the comments on driving less can lead to greater risks but Its the insurance companies assessments that dictates premiums and we do not have alternatives.

their calculations are no doubt based on historical data so less time on the road = less potential risk of accidents. Don't shoot me I didn't write the policy.😂

[Haliotis]

Hi, Bob.  I supposed most actuarial assessments use historical data for the purpose of arriving at a practical figure.  Because of the wide variations that affect the human psyche, there will always be instances where that figure does not fit the person under assessment.  Of course, the person assessed can be either either a better or a worse risk than calculated.

[Bper]

Hi Albert, The problem IMO is without alternative ways of insurance we are stuck with what we got. I think there has to be a change in the market if Pay-Per-Mile is introduced .

Going back to the assessments on milage insurance you have to ask why insurance companies don't see that driving less can lead to greater risks but equally I suppose driving many miles also poses risk.

If you was in the position of insurer what would your solution be?

I'm sure that an answer to this will be found but would you put money on it that it will be in the motorists favour☹️

[Haliotis]

The insurers employ people skilled in actuarial assessment in order to ensure that the bottom line stays positive.  A percentage is then probably added to make sure, and I feel sure that this must be the case, otherwise telephone agents would not be allowed to give on-the-spot lowering of originally stated premiums.  These are usually marginal as, on occasion when I have challenged the figure, the agent has passed the query up to a more senior person.

[AndyN01]

I've posted elsewhere that Insurance is a business. The purpose of a business is to make money. Everything else is part of the way to make (more) money.

So, however the pie is cut up..... the Insurers will make money by whatever methods and slight of hand they think they will probably get away with for most of the time with most of the customers 😉.

Andy.

[Cyker]

Indeed; If not for competition we'd be paying much more. A lot of companies, including insurance companies, supplement their income with the stock market, so when the stock market is having a bad time it affects their bottom line and they pass it on to us.

The more I look into how economics works, it's honestly amazing society hasn't collapsed already - It seems like all the big companies and even countries run on increasing debt being moved around like a hot potato!

 

[Haliotis]

I’m all for fair prices but, at the end of the day, the insurers do have to stay solvent.  We would not wish to be forever having to change insurers because our insurers had gone broke, would we?   That happened to me, admittedly a long time ago, and I was unknowingly uninsured until I arrived home from work to find a phone message from the broker.

I contacted him at home and he fixed me up with another insurer immediately, but that short period of no cover was very worrying.

[Bper]

 

For some considerably time now insurance companies have been able to increase their prices considerably and seen little or no backlash from the public. I think most people accept that companies have a right to make a profit but is it unreasonable to expect that if you use your car less when Pay-Per-Mile charging is brought in that this has to reflect in lower car insurance premiums and charging rates.

Household budgets are being stretched further year after year how much longer can these increases be realistically allowed to continue at the rate they are before the country goes into a recession.🙂