Vehicle Insurance & uninsured period penalty

[Eniigma]

Does anyone know where I can find the regulations regarding the penalties / discrimination for not being insured for a period?

I'm trying to figure out how insurance companies can legally, never mind ethically, penalise you for not having had insurance when you've not had anything to insure.

I've always had vehicle insurance as long as I've had a vehicle, the last 14 years or so, but in 2012 I sold my car and spent the next year and half working abroad and traveling. I did not own a car in that time. At the end of 2013 I returned and got a car and got insurance again, but now I'm penalised for not having been insured in the last two years even though I had nothing to ensure, htf is this legal or ethical?

I assume that should I say I've had uninterrupted cover for 12 years (the amount of time in the last 14 years I've owned a vehicle) they would deny my claim should something go wrong and they discover that I was not in fact insured in July 2012 even though I had nothing to ensure.

Edit: It's not because of claims history - I've had 4 claims in 14 years, once for a smash which was eventually recovered from the other guy who was at fault and 2 damages from attempted theft and finally a successful theft and all where more then 10 years ago.

 

[Sonic2k]

Which insurer is this.... name and shame

 

[reactor_sa]

Insurance works on a point system, where every year of uninterrupted comprehensive insurance, you get 1 point. The more points, the cheaper your premium. Interrupting the cycle obviously has some implications- the penalty must be a means of adjusting this.
Perhaps someone in the industry can clarify.

 

[Sonic2k]

Insurance works on a point system, where every year of uninterrupted comprehensive insurance, you get 1 point. The more points, the cheaper your premium. Interrupting the cycle obviously has some implications- the penalty must be a means of adjusting this.
Perhaps someone in the industry can clarify.

I call BS on that.
One accident, which was not my fault, pushed me into higher premiums ever since. Paying R700/month for a cheap car, is not nice, especially when Budget advertise same car, younger driver for R450/month.

 

[Creag]

Premiums today are mostly calculated by algorithms which are based on a number of different factors. The factors and the weighting of the factors in terms of the premium calculation will differ from insurer to the next.

Past claims experience plays a big role. Other factors may include value of vehicle, make, model, colour, extras, power to weight ratio, geographical area, use of the vehicle, security, where parked by day, where parked by night, driver or number of drivers, age, years that you have been licensed.

@OP, please advise who is / are the insurance companies? Did all insurance companies use take the same angle? Did you go direct or use a broker? If broker, who is the broker?

 

[Eniigma]

So far all the companies I've asked for a quote having been doing this or at least asking this when I ask for a quote and a couple have come back and said my higher premiums have been based on this. Santam, A&G and Outsurance so far and at least one or two others, but I can't remember who they where, I got those 2 quotes back in November.

Santam where the cheapest of the lot, but even now when I've gone from on the street parking to a new address in a far better area with 2 access controlled fences and undercover parking, it's not changed my premium because of this short period of being insured.

I've eventually ended up going through a broker that I pretty much trust and I believe her when she says she's been fighting it for me. I've now asked her to get an explanation from the insurance company for me on how this is legal. Wait to see what happens.

 

[kianm]

All i know is insurance companies are a scam, you see that when it comes to claiming after an incident. And this habit of increasing premiums every year even when you haven't claimed for anything

 

[Eniigma]

Insurance works on a point system, where every year of uninterrupted comprehensive insurance, you get 1 point. The more points, the cheaper your premium. Interrupting the cycle obviously has some implications- the penalty must be a means of adjusting this.
Perhaps someone in the industry can clarify.

Premiums today are mostly calculated by algorithms which are based on a number of different factors. The factors and the weighting of the factors in terms of the premium calculation will differ from insurer to the next.

Past claims experience plays a big role. Other factors may include value of vehicle, make, model, colour, extras, power to weight ratio, geographical area, use of the vehicle, security, where parked by day, where parked by night, driver or number of drivers, age, years that you have been licensed.

So far I've only had one company ask about the colour and everyone I've spoken to has said the colour makes no difference.

As for the rest, I've got no red flags on any of those except the night time parking and which when I changed it, did not effect my premiums. Maybe at the end of the day I'm not getting that bad a deal, but I'm pretty sure I am.
On an old golf 3 (valued at 40k in 2012) I was paying R300 pm, now on a Cruze at R150k I'm paying over R850pm, A&G and Outsurance where over R1000 when I first asked for a quote.

 

[Venomous]

So far I've only had one company ask about the colour and everyone I've spoken to has said the colour makes no difference.

As for the rest, I've got no red flags on any of those except the night time parking and which when I changed it, did not effect my premiums. Maybe at the end of the day I'm not getting that bad a deal, but I'm pretty sure I am.
On an old golf 3 (valued at 40k in 2012) I was paying R300 pm, now on a Cruze at R150k I'm paying over R850pm, A&G and Outsurance where over R1000 when I first asked for a quote.

ouch!
I'm paying less than the R850, for a car valued at nearly double that. And the vehicle possibly has a higher engine capacity(V6 - affects premiums) as well...

 

[Creag]

All i know is insurance companies are a scam, you see that when it comes to claiming after an incident. And this habit of increasing premiums every year even when you haven't claimed for anything

I'm overtly biased. I work in the industry. In 20 years of insurance and claims, I have only had one claim where I felt I was harshly dealt with.

You either work for King Price or this statement is complete generalisation.

 

[kianm]

I'm overtly biased. I work in the industry. In 20 years of insurance and claims, I have only had one claim where I felt I was harshly dealt with.

You either work for King Price or this statement is complete generalisation.

Me, working for King Price

 

[HavocXphere]

now I'm penalised for not having been insured in the last two years even though I had nothing to ensure, htf is this legal or ethical?

Either throw a tantrum or get a broker to do it for you. Obviously they run automated systems to calculate risk but surely common sense must prevail - esp if its specifically pointed out that there are unusual circumstances.

Don't think you'll have luck with the laws angle. afaik insurers are entitled to assess risk however they see fit (obvious discrimination aside)

 

[Creag]

Me, working for King Price

Enough said.

 

[kianm]

Enough said.

not everyone shares the same experiences as you, collecting premiums is more important to them, the rest comes second.

 

[Creag]

not everyone shares the same experiences as you, collecting premiums is more important to them, the rest comes second.

The majority do, I'd say, unless the Short Term Ombudsman is working for the insurers?

 

[Eniigma]

Finally got some clarification on this today from Auto & General, essentially they are "not penalising me for not having insurance, but because I didn't have insurance my no claims bonus gets set to zero", never mind that my last claim was in 2003 or 2004.

Funny how my premium they quoted me on went from R700ish (with 7 years no claims) to R900ish when I clarified that, "but no they're not penalising me". Douches.

 

[Hemi300c]

Get a broker.