Impact of location, job title etc on your car insurance

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Peanuts20

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I was reading this over the weekend from Chill and I thought it was fascinating. Why, for example, is insurance for a medical secretary 2% more expensive the for an ordinary secretary?. What on earth are they doing in Longford to make insurance so expensive there?

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Don't different underwriters have different actuarial criteria based primarily on risk but also on other factors such as the market segments that they're targeting?
 
It's fascinating alright. One of my adult children's motor renewal came to the family Dublin home, he had recently bought his own home nearby but now had a different postal code. He notified his insurers of the new Dublin address and his premium went up by €150.
 
Peanuts20 said:
I was reading this over the weekend from Chill and I thought it was fascinating. Why, for example, is insurance for a medical secretary 2% more expensive the for an ordinary secretary?. What on earth are they doing in Longford to make insurance so expensive there?
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Thanks, a useful read, and allays my suspicions that they all used random number generators!
 
Limerick, Louth and Longford are areas in the news in recent history as having problems with feuding gangs, crime and violent disorder.
Medical secretaries may work unsocial hours or suffer more stress than ordinary secretaries, this might explain why they are a slightly higher insurance risk.
 
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Don't forget that this analysis seems to be based on Chill's own broker data and may not cover all underwriters.
 
S class said:
Limerick, Louth and Longford are areas in the news in recent history as having problems with feuding gangs, crime and violent disorder.
Medical secretaries may work unsocial hours or suffer more stress than ordinary secretaries, this might explain why they are a slightly higher insurance risk.
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I know lots of hospital medical secretarys, none did unsocial hours. They were Mon to Friday.

I'd agree a secretary working in an area like child protection may have to type distressing letters.

Otherwise I'm surprised they are being penalised.
 
Seems odd that a VW Polo is more expensive to insure than a Passat or an Audi A4, with the latter being more expensive cars with typically much larger engine sizes.
 
becky said:
I'd agree a secretary working in an area like child protection may have to type distressing letters.
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They don't assess the risks associated with the jobs themselves, that's not how the actuaries work. It's all based on the data available to them. They review the claim rates and costs from others with that job title and if they find medical secretaries on average are responsible for 10% higher payouts than other secretaries, that will be factored into the calculations.

On address, live in an estate with a serial claimer or two, you will pay more than the estate next door where claim rates are lower.

Similar with the VW Polo Vs a Passat or A4, the value of the car is not the sum the insurers are concerned about when third party and injuries are generally greater costs. Polos will be penalised if they are involved in greater claims payouts for the insurers. It's why new cars can have surprisingly lower premiums, people driving a new car are usually a little more careful.
 
Leo has explained it all.
Its got nothing to do with the cars and everyting to do with the drivers. If Polos are involved in more accidents, the premium for Polo drivers is higher.
The medical secretary thing sounds to me like a statistical anomoly caused by small sample size. The 2% difference isnt statisically significant.
 
huskerdu said:
Its got nothing to do with the cars and everyting to do with the drivers. If Polos are involved in more accidents, the premium for Polo drivers is higher.
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Indeed occupation and car type are really proxy for the type of driver you are. By EU law they can no longer discriminate on the basis of sex directly but if you have a very male occupation (like construction) or a female one (like healthcare) then it will be reflected in the price indirectly.

I would imagine the models that actuaries use now are trained on dozens of observations for millions of drivers. With these kind of models sometimes there is a relationship that doesn't have much of a plausible rationale such as Longford drivers seemingly more dangerous than Westmeath ones. But if the model picks it up then it will be reflected in the price.
 
Leo said:
They don't assess the risks associated with the jobs themselves, that's not how the actuaries work. It's all based on the data available to them. They review the claim rates and costs from others with that job title and if they find medical secretaries on average are responsible for 10% higher payouts than other secretaries, that will be factored into the calculations.

On address, live in an estate with a serial claimer or two, you will pay more than the estate next door where claim rates are lower.

Similar with the VW Polo Vs a Passat or A4, the value of the car is not the sum the insurers are concerned about when third party and injuries are generally greater costs. Polos will be penalised if they are involved in greater claims payouts for the insurers. It's why new cars can have surprisingly lower premiums, people driving a new car are usually a little more careful.
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Thanks for clarifying. I've often wondered what to call myself from the drop downs. Think I'll go with administrative staff next time.
 
It’s about the driver rather than the car.

Chances are the driver of the €5,000 Polo is more risky than the fella in the €100,000 Mercedes.

Plus the car is less safe.

It’s not the theft of destruction of the more expensive car that drives the premium; it’s the prospect of the driver causing carnage.
 
Coldwarrior said:
Seems odd that a VW Polo is more expensive to insure than a Passat or an Audi A4, with the latter being more expensive cars with typically much larger engine sizes.
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I suspect it's safety features.

I've a Volvo (yep, over 50) and it was about 25% cheaper than similar size cars from other marques.
 
Cars are loaded according to performance. The base model Polo will be cheaper than the larger engined premium model. Also the model with more safety features will have a lower cost than a basic model.
Occupational loading can be for various reasons relating to risk. Bar staff were typically loaded as they would be traveling home at pub closing times which is a higher risk time for collisions.
 
peemac said:
I suspect it's safety features.

I've a Volvo (yep, over 50) and it was about 25% cheaper than similar size cars from other marques.
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It's the other way round.

Volvo has a reputation for safety but no car is 25% less likely to cause a collision on its own.

But Volvo's reputation for safety attracts risk-averse drivers like you who are less likely to crash due to a conservative driving style.
 
They also load for a car if its more expensive to repair.

But they also want to make a profit so I'm sure there's some loading on which policies can carry a higher profit margin.
 
I once asked an insurance underwriting bod to explain this general issue.

The answer I got was that underwriters use what they call "risk and claim" factors in their pricing decisions.
The problem is that the list of what might constitute risk and claim factors is potentially endless.
An additional complication is how they use or interpret the data.

IMHO insurance underwriting seems to be less of a skill than it used to be and has probably been largely superseded by the ever present phenomenon of the accursed algorithm. This is essentially the "what the computer says" approach that we all seem to be facing in our dealings with financial institutions. This takes me back to the notion with computerised data management that what comes out is reflective of what was put in initially i.e. rubbish in = rubbish out.

If you really want to trip the mental circuit-breaker of a so-called insurance underwriter ask them to explain and justify their underwriting decision.
 
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