Lance Dopestrong wrote:Xilter wrote:Cunobelin wrote:
I have always smiled at this........ no-one queries car colour asa safety factor
I have heard rumours of select insurance companies offering a (minuscule) discount on bright red,yellow flourecent green cars. As they are supposedly less likely to be hit by someone not seeing them.
If that's true, it's just another excuse for insurers to screw over customers - car accident stats by colour do not neatly ascend from the brightest to darkest.
There's no proven link between performance and your chances of having a smack - the TRL found that in many cases the opposite was true , particularly with motorcycles - but that doesn't stop insurers from using it as a reason to charge more. Indeed, it didn't stop the government from ignoring their own research and introducing a power grade licencing system for new motorcyclists.
Insurers exist to extract maximum income by targeti g those who they perceive can afford it the most, a far more viable business model. If they based it upon genuine risk they'd be bankrupt, so they invent a risk hierarchy all of their own to justify the practice.
The miniscule discount for the car's colour would be a marketing gimmick, on a par with giving out a free pen with each new policy.
As to the question of a link with performance and accidents, methinks I hear the whine of a high performance car/motorcycle (owner). Insurers have to try to identify what are the factors that result in increased risk and increased claims experience. No system of pricing based on risk factors will ever be perfect, which is why there will be variations between different insurers' prices, but they will all generally be based on claims experience. And the insurers have a great deal more data on that than the TRL.
Moreover high performance vehicles will typically be more expensive to replace and also more expensive to repair: it's not just about the probability of an accident, but also about how much it will cost. The old Mini Metro was a very low performance car, but the claims costs were very high because they were prone to being written off in accidents which might only cause relatively minor damage to other cars.
Motor insurance in the UK is a highly competitive market, so competitive that some of the big name insurers are probably only in that sector competing with the insurers who specialise solely in motor insurance, because they need to be in order to maintain and protect their other far more profitable lines of business, like household insurance and life assurance (they reckon they have a better chance of getting people to buy those covers if they are already an existing customer, e.g. they insure their cars).
That competition means that if the various pricing criteria for motor insurance did indeed bear no relation to the level of risk, another insurer would be able to enter the market and make large profits by offering lower prices to those who were truly lower risk. Funnily enough, that hasn't happened. Whenever there have been general lowerings of the prices of motor insurers it has been driven by increased competition (resulting in low profits and often losses for many insurers) or improvements in technology which have cut the insurer's costs (typically by using IT and automation to replace employees).
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