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the UK model for auto insurance

Discussion in 'Politics, Laws, Government & Insurance' started by simon varley, Oct 18, 2010.

  1. I only have direct long term experience of driving and riding in two countries: England where I grew up, and now Australia for the past 4-and-a-bit years. My opinion is that, on average, Australians are significantly worse road users in many significant areas. My reading of posts here is that I'm far from alone in these opinions.

    So. I am starting to believe that the insurance systems in the two countries impact significantly on the behaviour of the road users, and that maybe adopting the UK model might, possibly, improve driving and riding standards over here.

    In the UK auto insurance is compulsory, but there is no government supplied cover - all insurance is purchased by individuals on the open market. The other significant difference is that rather than the insurance companies assuming you have a good rating as they do here, you start with a poor rating and increase this over time. What this means in reality is that poor drivers price themselves out of the market, so there is a direct financial incentive to good driving.

    Young drivers simply cannot afford to buy insurance on high powered cars so they are forced to spend a number of years in low powered cars simply to accrue the NCB that lets them insure their dream. Soccer mums (theoretically) only get to make one or two mistakes before they loose their protected NCB and can't afford to insure their Chelsea tractors.

    the model does push premiums up - I was paying significantly more for both car and bike insurance than I am here, so it's certainly not a perfect solution but at the moment it's about the best solution I can come up with to improve driving standards. Consistently bad drivers price themselves off the road....

  2. It's only a few people recently that have been handing out NCB's for first time customers in an effort to gain some market share. Sometimes it works... sometimes they never really pull a profit and fold.

    I think our problem with driving is a lot more complex. We have problems with attitude and a lack of respect for other road users. Also, I think a lot of the issue is that people have no real interest or care about the car they operate. While we do have a car culture, it's more of the lowered shitty VN commodore type than an actual interest in...

    ah, f**k it I'm rambling.
  3. Dont like it - think we suck as drivers ?

    there is always an option to return to England

    seriously though you start of on 0% no claim bonus here and work up to 60 or even 65 % by having a good record of no at fault claims

    I did this all in EXTREMELY high powered vehicles starting at age 17 by 21 I had full NCB - cost me heaps in the beggining but recouped it back in big savings over time so in the end *meh* it works out even

    The "government " supplied cover here - are you referring to "compulsory third party insurance" or the fact that there Government has in place a nominated insurer scheme in case you are injured by a unregistered uninsured vehicle ?

    Dont forget you have 65 million people in the UK an area the size of victoria -- of course you buggers have more accidents and people have different driving habits

    it takes you a day to drive to scotland -- for an Aussie in the outback thats like popping down to the local supermarket for milk
  4. I'm in two minds on this one. Stratospheric insurance costs certainly motivated me to both minimise my claims and avoid getting demerit points. Either would have simply put me off the road for most of my UK biking career.

    OTOH, I would not want to see Australian insurance premiums at UK levels. They are truly ridiculous even before any naughtiness loading you may incur.

    Last figures I saw, per head the Brits don't have any more crashes than Australians. Given the high traffic densities and higher average speeds, I think that says something.
  5. I also came from the UK and you mentioned
    But what was becoming an increasing problem was drivers just simply not insuring their cars at all as the premiums were too high and if you have an accident with one of the uninsured masses it caused all kinds of hassle to get some kind of financial compo.
    The compulsory third party insurance included in the rego over here goes along way to helping that.

    I think Quarterwit made some good points about attitude and lack of respect for other road users which go a long way towards the driving standards so I think tackling those areas would help a lot.

    BTW, I like the fact that they give you credit for having a good driving record in a car when quoting for bike insurance over here and I don't ever remember any UK insurance company doing that!
  6. Nope. Simply didn't happen. Bike and car insurance had absolutely no overlap that would be positive for the customer.
  7. As to who's better or worse how knows???

    But the minimum level of insurance required in the UK is third party property and not just third party injury here which solves a lot of problems coupled with the Motor Insurance Bureau with covers the uninsured.
  8. That's only a recent development then. Time was (less than 20 years or so ago) when the minimum legal level of insurance was third party injury, same as here. "Twas referred to as "Act Only" (as in, only what was required under the Road Traffic Act). No company really offered it, though rumour had it that drivers with apalling records might be able to obtain it when noone would touch them for anything else.
  9. Apparently 1988 it was changed. But even then I'd never heard of personal injury only ever being available...
  10. I might have missed something but the 'UK model' for insurance sounds exactly the same as here. Start off with a zero rating and improve with time and age with premiums base on risk classes and level of cover...? what am I missing.:s
  11. The only difference is the minimum level of cover here, I think the actual relevance of NCB disappeared long ago with the advent of NCB protection etc...

    As far as the better drivers, apart from the fact in my experience the test is easier in NSW that it was in the UK.

    I think the distance and lack of a coordinated public transport system mean that there as people on the road hare that just should be, and a lot of those know it too.
  12. Not sure about the Eastern States, but here in WA your Third Party cover is part of your rego fee and its cost takes no account of history, experience, occupation, gender or other risk factors. A 19 yo driver with multiple convictions for serious driving offenses and a string of major crashes (OK, OK, a 19 yo may not have been around long enough to rack much up and get their licence back, but you know what I mean) will not be refused insurance and pays exactly the same for legal minimum insurance as a 50 yo with a lifetime clean record, advanced training etc.

    Under the UK system, that 19 yo may well be unable to obtain insurance at all or may be required to pay a four figure premium for TPO on a knackered, base model Ford Fiesta, whereas our hypothetical 50 yo will not only have their 60% (or whatever) NCB, but will be paying a significantly lower premium anyway, even befor No Claims.

    IOW, even for the most basic level of cover required to drive legally, being a low risk is beneficial. Indeed, if you're young, skint or want to ride a motorcycle, it's pretty much essential.

    I agree that the situation arises where those unwilling or unable to pay high premiums will drive uninsured anyway. Of course it has always happened and is probably more prevalent now as premiums rise and incomes fall. However, I remember far fewer cases of people I knew getting hit by uninsured drivers and being unable to recover their losses than I have encountered since coming to Australia.

    I'm inclined to think that neither system is perfect. I would like to see an amalgamation of the better points of both, but I'm not convinced it would be politically possible.
  13. sorry mate driver but driver education and enforcement of all road law other than speeding will make all the difference...changing insurance does nothing

    People here drive like wankers because they know as long as they are not doing the "crime of the moment" eg; hooning, speeding, pissed or talking on a mobile the likelihood of getting a ticket is non practically non existent. In addition people here have been lulled into a false sense of security...after all "speed is your biggest killer" so don't do that and it's quite ok to tailgate, while applying lippy and eating weetbix on the way to work
  14. you see, I'm really not convinced about that. The demographic that are the problem are not listening to the messages. You're right that essentially they don't care, so the question is just how to make them care enough to change their behaviour. Enforcement isn't going to work. It doesn't work now and in reality we're never going to get the policing levels to make it work. Education? I agree, but the people who need it most aren't listening. The only thing I can think of that will make somebody change is to hit them directly in the pocket. Hard.
  15. this is really the point I was trying (perhaps badly) to make. In Victoria at least, there is no legal requirement for anybody to have more than the basic CTP included in their rego. And if your driving a $500 POS on bald tyres why would you? especially if you're such a great driver that nothing's ever going to happen to you. In England it's not a case of borrowing money to pay an excessive premium - if you are deemed too high a risk you just cannot get the insurance cover at ANY price. While that might encourage more uninsured drivers, that's easily fixed (in the UK at least) because you can't renew your rego without a current insurance letter, and ANPR cameras quickly pick up unregistered cars.
  16. Most of the system described (apart from 3rd party), is the same as here, AFAICS.

    So, really, the only advantage to the UK model and (for example) Victoria, is that there is a minimum requirement for 3rd party property cover. That is an absolute essential IMO - we should adopt it IMMEDIATELY.

    Many other administrations have it, too. Just because there will be some non-compliance doesn't mean the system is wrong. The principle (that innocent victims should not have to bear the burden) is as true of property as it is for personal injury.

    On the other hand, the Victorian government-run 'no fault' 3rd party personal cover is a great system (whatever the knobs currently running TAC are doing to undermine it) and should be adopted by every administration, everywhere.
  17. Nope, the main advantage of the UK system is that, if you're a serial c*&khead, you will be unable to drive legally or, at least, something small and slow will be your very expensive lot. Be good and you can aspire to something decent. It's a reward, of a sort.

    It's not a perfect system. IMHO everybody pays way too much, which is what tends to happen when private service providers are fed a captive market. This was particularly the case with bike insurance, where only a couple of companies offered anything even remotely affordable.

    But you don't see too many 17 year olds making spectacular errors of judgement in 2 tonne V8s, and it's not just because there aren't many V8s.
  18. I always thought the best thing to do would to make third party property compulsory and comprehensive illegal. Watch how much better people drive when they have to pay the full cost of the car out.
  19. In principle, I agree. But shit happens (ie. gravel), and you cannot always find the culprit.
    There's a case for no payout to the offender in the case of a proven offense, though.

    (Not sure if I want to see it happen).
  20. It's simple,
    You introduce a compulsory third party damage insurance as a minimum, pricing it in steps, high powered cars cost more than low powered, experience etc.
    Not to be confused with third party injury insurance which is the registration component.