How does insurance work?

walterl said:
>>>So why did the Broker move your policy to another insurer?

The original insurer probably wanted to up the premium more than what the new insurer was willing to charge
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The broker should still have discussed this with him. Changing or even just getting quotes from other insurers affects your credit score.
 
SaiyanZ said:
The broker should still have discussed this with him. Changing or even just getting quotes from other insurers affects your credit score.
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How? I've never seen insurance queries on my report?
 
He wasn't supposed to switch you to a more expensive policy. You have a dodgy broker.
Non of that is your fault and the insurance would still claim the money back from the party that was at fault.
How much you paid vs how much you can claim is irrelevant, insurance is a group fund/scheme. Everyone' premiums contribute towards covering the damage of those less fortunate.
 
SaiyanZ said:
You have many claims in 2019 but no insurer would force you to cancel. They'd just increase your premium until you do. So why did the Broker move your policy to another insurer?

Sounds like a dodgy broker (might not be the case) as brokers usually get upfront commission as well as commission over the lifetime of a policy. So by signing you up with another insurer they probably got a bit of a bonus for the "new" sale.

Also, just submit your docs to the old insurer. They should still pay back your excess if (big IF) they recover the funds. Happened to me a year or so ago where I was paid back my excess a year after leaving the insurer. Accident was a couple years earlier so it took them about 3 years to recover. I had completely forgotten about it and had written it off.
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Currently I have no excess.

This may be a reason to reconsider that - have a higher excess which should decrease the premium and if you're in an accident that is not your fault you get the excess back?
 
xrapidx said:
How? I've never seen insurance queries on my report?
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It should be on there if an insurer requested your credit score when you asked for a quote. Apparently this doesn't affect the credit score that is used by banks and credit card/loan issuers.

However some insurers use a different adjusted score which includes the number of checks on your credit score. It makes sense to do so since on average if you're someone that is getting quotes often then you're a high lapse risk. Or it says you have money problems and might not be able to pay.
 
SaiyanZ said:
It should be on there if an insurer requested your credit score when you asked for a quote. Apparently this doesn't affect the credit score that is used by banks and credit card/loan issuers.

However some insurers use a different adjusted score which includes the number of checks on your credit score. It makes sense to do so since on average if you're someone that is getting quotes often then you're a high lapse risk. Or it says you have money problems and might not be able to pay.
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Interesting... a lot of my stuff doesn't appear on the credit report though, including accounts. (vehicle, bond)
 
rietrot said:
He wasn't supposed to switch you to a more expensive policy. You have a dodgy broker.
Non of that is your fault and the insurance would still claim the money back from the party that was at fault.
How much you paid vs how much you can claim is irrelevant, insurance is a group fund/scheme. Everyone' premiums contribute towards covering the damage of those less fortunate.
Click to expand...

What if the original insurer didn't want him as a client anymore? The other new insurer was willing to take the risk, or do you want OP to have no insurance?
 
supersunbird said:
What if the original insurer didn't want him as a client anymore? The other new insurer was willing to take the risk, or do you want OP to have no insurance?
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As a FSP you cannot make changes to a policy without discussing and advising the client. The broker, if the insurer gave notice would have had 30 day's minimum.

I suggest get a new broker.
 
Hemi300c said:
As a FSP you cannot make changes to a policy without discussing and advising the client. The broker, if the insurer gave notice would have had 30 day's minimum.

I suggest get a new broker.
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For your convenience,I have quoted the related post below, is there an indication that what you state hasn't happened?

PhreakBoy said:
In the last 3 years my claims history was:

2017: Floor polish machine at airport parking passed to close to the back of my car and damaged my bumper
2019: Cyclist coming downhill against the flow of traffic hit my drivers side door as I was turning right
2019: Water pipe burst above kitchen resulting in emergency plumbing and ceiling replacement
2019: Rear ended by third party in company vehicle

To my mind, none of these were as a result of negligence on my part.

These claims have now resulted in the cost to the insurers being about R10k more than what I have contributed in premiums during the life of the policy. This has resulted in the Broker switching my insurance to a different insurer with a resultant increase in premium.

My argument is that in both the cyclist and the rear end claim, my insurance should be recovering the loss from the other parties' insurance and there should be a limited impact on my premium.

To further frustrate me, the old insurance is now requesting that I submit documents to assist them in recovering the funds. If they are successful I will not get any benefit as there is no incentive for them to refund me any of the premiums I paid. There is also no incentive for the new insurer to decrease my premium as they will not get the benefit of the recovery that goes to the first insurer.

As a result I am highly frustrated with the broker in all of this and do not believe that they've added any value in the process.
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supersunbird said:
What if the original insurer didn't want him as a client anymore? The other new insurer was willing to take the risk, or do you want OP to have no insurance?
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I highly doubt that. The brocker probably saw an opportunity to increase the % of money he takes with some BS story because he now had to work a bit. That's it.
 
I know something similar happened to someone else, it was discussed on the 702 money show a few months ago, Wendy Knowler got the original insurer to decide to reinstate if I recall correctly.
 
supersunbird said:
My broker charges the same fee no matter the size of my policy, are many percentage based? @Hemi300c?
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Mine has a % and an additional adim fee.

But it's only 3rd party so it's insignificant amount. It was a struggle to get someone just to sell me 3rd party cover.
 
rietrot said:
He wasn't supposed to switch you to a more expensive policy. You have a dodgy broker.
Non of that is your fault and the insurance would still claim the money back from the party that was at fault.
How much you paid vs how much you can claim is irrelevant, insurance is a group fund/scheme. Everyone' premiums contribute towards covering the damage of those less fortunate.
Click to expand...

Further clarification: My broker is a company, not an individual.

I suspect that the original insurer also increased and that the new insurer was cheaper than the original one. Or as stated below your post that the original insurer no longer wanted to insure me. I can't know either for sure and need to trust the broker.

The broker did send me a notification of the change, when I queried it, they brushed it off as a strategic move on their part to move some of their clients across to the new insurer and that they've decided to also move me as it was cheaper and a saving for me. Again, I can't validate this and need to take their word. (Or do I?)

I got a comparative quote from another well known brokerage firm and unfortunately it is more expensive than my current insurance.
 
PhreakBoy said:
In the last 3 years my claims history was:

2017: Floor polish machine at airport parking passed to close to the back of my car and damaged my bumper
2019: Cyclist coming downhill against the flow of traffic hit my drivers side door as I was turning right
2019: Water pipe burst above kitchen resulting in emergency plumbing and ceiling replacement
2019: Rear ended by third party in company vehicle

To my mind, none of these were as a result of negligence on my part.

These claims have now resulted in the cost to the insurers being about R10k more than what I have contributed in premiums during the life of the policy. This has resulted in the Broker switching my insurance to a different insurer with a resultant increase in premium.

My argument is that in both the cyclist and the rear end claim, my insurance should be recovering the loss from the other parties' insurance and there should be a limited impact on my premium.

To further frustrate me, the old insurance is now requesting that I submit documents to assist them in recovering the funds. If they are successful I will not get any benefit as there is no incentive for them to refund me any of the premiums I paid. There is also no incentive for the new insurer to decrease my premium as they will not get the benefit of the recovery that goes to the first insurer.

As a result I am highly frustrated with the broker in all of this and do not believe that they've added any value in the process.
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You are in terms of the policy and contract obliged to assist the insurer even if past as you agreed to waive your subrogation rights to incidents during the period of insurance.
 
SaiyanZ said:
You have many claims in 2019 but no insurer would force you to cancel. They'd just increase your premium until you do. So why did the Broker move your policy to another insurer?

Sounds like a dodgy broker (might not be the case) as brokers usually get upfront commission as well as commission over the lifetime of a policy. So by signing you up with another insurer they probably got a bit of a bonus for the "new" sale.

Also, just submit your docs to the old insurer. They should still pay back your excess if (big IF) they recover the funds. Happened to me a year or so ago where I was paid back my excess a year after leaving the insurer. Accident was a couple years earlier so it took them about 3 years to recover. I had completely forgotten about it and had written it off.
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This.

All insurers will have rules about this sort of thing. There is even a commission clawback table produced by the government that specifies how much commission can be clawed back if a policy is cancelled within a certain time frame. It depends on if the commission was paid up front (ie lump sum) or as and when (monthly).

Of particular importance is that 2 years after the start of your policy, no commission can be clawed back. Your broker keeps all of it. So yes, this kind of churn is common - brokers do it to get a bit more money. They find you a new insurer, you pay a little more, broker gets a nice big chunk. A nice Christmas bonus. Insurance companies do all they can to keep clients, but a lot of it is controlled by the brokers, so there isn't much they can do.

You'd be surprised at the amount of software engineering effort spent on commission systems in insurance companies.

It isn't even dodgy brokers that do this - it is all of them. They all want a pay day.

Also those events may not have been your fault, but it doesn't matter, it shows on your policy as a claim. Let's say you park your car in a stupid place and something happens - it isn't directly your fault, but you indirectly caused it by parking in a silly place. Not saying that this is the case with you, but look at it from the insurance companies - they care about money in vs money out.
 
Insurance is more about risk, than it is about fault. When it comes to car insurance fault is just another factor that adds to the risk, just like living in a dodgy post code also adds to your risk profile, regardless of how careful you are.
 
PhreakBoy said:
Currently I have no excess.

This may be a reason to reconsider that - have a higher excess which should decrease the premium and if you're in an accident that is not your fault you get the excess back?
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There is no guarantee of getting the excess back. That happens only if the insurance co. is able to recover the amount.
 
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