Car and Caravan Insurance - Premium Creep

Submitted: Thursday, Jan 03, 2019 at 20:52
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I have had my 2014 Prado and Kimberley Karavan insured through the same insurance company for the last 4 years (CMCA insurance deal). I wanted a single insurer for both the car and the van on the basis that any major accident would probably involve the car and the van - so having one insurer was likely to result in an easier claims process.

The original premium was $1750 (insured values being Prado $68k and KK $90k). 4 years later the renewal premium is now $2350 with the Prado value being $48k and the KK $82k. I have had one claim when the Prado was backed into in a parking lot. No fault no excess claim.

I quite like the current policy T&Cs but the premium increases of about $150/yr, for the last 4 years, annoy me.

So I am interested in the experience and opinion of members in three things.

A) Is having a single insurer a real advantage when it comes to making a claim?
B) What do others do to manage premium creep with their insurer(s)
C) Do you insure car and van with multiple insurance companies?

Yes, I appreciate that insurance is a messy subject. However I would value your feedback and especially real experiences.

Regards John
John
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Reply By: Rangiephil - Thursday, Jan 03, 2019 at 21:10

Thursday, Jan 03, 2019 at 21:10
Being with YOUI one thing I found is that you never accept their online quote.
You have to ring them and threaten ( nicely ) to change insurers and miraculously the premium comes down.
Having said that my premiums have been acceptable now for 5 years without going up by more than a few percent.

They were totally uncompetitive for my camper trailer however and believe it or not NRMA were the most competitive!

I have had 2 no fault accidents and one at fault accident with no premium increase.
BUT we are old farts with clean licences .
My son tried Youi but the premium was astronomical.
Regards Philip A
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Follow Up By: Member - J&A&KK - Thursday, Jan 03, 2019 at 21:35

Thursday, Jan 03, 2019 at 21:35
Thanks Philip

I have yet to ring my current insurer and haggle. So I will give that a go.

We too are old farts with clean driving records. So the constant premium increases are irritating.

Cheers John
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Follow Up By: Member - nickb "boab" - Friday, Jan 04, 2019 at 06:24

Friday, Jan 04, 2019 at 06:24
The YOUI ads on the TV just do my head in
:((
Nor have I heard anything good about them

We have been using Westfarmers insurance for a number of years now after a mate suggested them after using brokers for years and have not noticed any significant increase in insurance , have found them to be very competitive with there policies although they don't claim to be a mainstream vehicle insurer . have had a few claims with them and I must say they have bent over backwards to keep me happy .
had a claim a few years ago with one of our cars which was fairly straight forward they didn't want any more than one quote . Pluss they give me a call just before the renewal comes up to discuss any changes and sometimes come out for a face to face which is nice service these days which you don't often get .
Also there has been a bit of coverage of the insurance industry on Current Affair type shows of late talking about this very subject . Pays to shop around , good luck .

Cheers Nick b

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Follow Up By: baznpud - Friday, Jan 04, 2019 at 09:00

Friday, Jan 04, 2019 at 09:00
In regards to Youi, when we got a quote from them for our Cruiser we were advised that they have a limit of $2500 for non standard accessories, so if you are like us and have some $10000 you have to remove them from the vehicle after the accident, if you can.
That limit could have changed by now so worth checking.
baz
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Reply By: Bobjl - Thursday, Jan 03, 2019 at 21:51

Thursday, Jan 03, 2019 at 21:51
I understand many CMCA members sing the praises of the Ken Tame Insurance cover, premiums and service, which suggests they are consistently competitive so perhaps the creep is justifiable.

Having both Van and vehicle with the one Insurer is not necessarily a benefit. Some Insurers including Motoring Associations Insurers have different claims departments for different claim types [car/caravan/home], so there may be separate claims to be lodged. Arguably preferable to have one Insurer, but must be cost justified.

Manage premium creep by shopping the market often/ at least every couple of years, loyalty is not what it once was. Only swap Insurers when you are positive the cover is equal to or better than what you currently have, there are some serious differences in covers available. EG, is engine damage arising from use of wrong fuel or lubricant covered? Many examples of $10-20k uninsured engine damage to modern diesel engines when dirty or wrong fuel used.

Don't over insure - some of us get a warm and fuzzy feeling on the belief we can make a profit when the Sum Insured - Agreed Value is much higher than what the insured vehicle/van reasonably can be replaced for in the event of a total loss.

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Follow Up By: Bobjl - Thursday, Jan 03, 2019 at 21:55

Thursday, Jan 03, 2019 at 21:55
I should have also said I do not insure with the CMCA facility, I have a better alternative [for 4wd, other car and caravan] through another Insurer facility which is not available to general public.
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Follow Up By: Member - J&A&KK - Friday, Jan 04, 2019 at 23:00

Friday, Jan 04, 2019 at 23:00
Thanks Bobjl

I cannot say that I sing the praises of the CMCA facility. One no fault claim was dealt with professionally and efficiently. But that is what I expect when paying $2k+ per annum for insurance.

You can read many reviews where persons sing the praises of their insurer, but often fail to mention that they haven’t made a claim.

I accept that a regular shop around for prices is worthwhile but comparing policy terms and conditions is not simple. My needs require the insurer to cover me when I am truly “off road” not just off the bitumen.

I appreciate your response.

Regards John
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Reply By: RMD - Thursday, Jan 03, 2019 at 22:36

Thursday, Jan 03, 2019 at 22:36
J&A&KK
Although you term it, premium creep, the company, like many others, has to allow for the higher cost of replacement parts which they claim are more difficult to source and more costly too, as the vehicle/s get older.
Therefore they cover there rear ends by charging more as the years progress. My 8 year old ute costs more than a newer vehicle even though the new vehicle costs more to buy.
Companies are in a win winn, never lose situation, while valued cutomers are in a lose, lose, never win situation. It is called insurance.
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Follow Up By: Shaker - Saturday, Jan 05, 2019 at 09:47

Saturday, Jan 05, 2019 at 09:47
I can’t see how they cost more as a lot of them insist on secondhand parts!
I had a vehicle run into the back of my Prado & badly damage the rear door & despite my vehement objection, the other parties insurer insisted on fitting a secondhand door.


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Reply By: Kenell - Friday, Jan 04, 2019 at 09:00

Friday, Jan 04, 2019 at 09:00
John,
Contrary to popular opinion and much that one reads on forums such as this one, insurers don't make a lot of money on motor insurance. Profit margins are generally in the low single digit percentages. Weather events have a large impact on profit. The Ken Tame offering is underwritten by Allianz and from my observations is a good product. I haven't had any direct experience from a customer service or claims perspective but the PDS is written for RV users specifically. The trouble with schemes such as this is that the underwriter measures its individual experience and prices it accordingly. Being much smaller in customer volumes than a main stream insurer it can experience volatility in results. Ken Tame then faces the position of either exposing their customers to the increases or seeking an alternative underwriter. The latter is now unattractive because a potential new underwriter looks at the experience and prices accordingly or doesn't want it at all. Now dealing with the likes of Ken Tame gives you the comfort of having an advocate in your corner rather than dealing with the underwriter on your own when the ship hits the span. Here is my view on what people should do.

1. Before you choose an insurer read the PDS - REALLY read the PDS. It could be a decision worth a lot of money.
2. Haggle - your insurer would rather you challenge their pricing than leave them if you have a good history.
3. Don't move over a few $. Loyalty (despite what others say) is highly considered by insurers. There are often situations where an insurer will make a call taking into account longevity of the relationship.
4. Don't be too concerned about keeping RV and car together - particularly when there are specialist insurers involved.

Good luck with it.

Ken
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Follow Up By: Member - J&A&KK - Friday, Jan 04, 2019 at 23:14

Friday, Jan 04, 2019 at 23:14
Hi Ken

Many thanks for the comprehensive reply. It looks like you have some inside knowledge of the insurance industry.

I agree with your recommendations. When I was working( a few years ago now) I was responsible for pulling together a range of corporate insurance policies with an annual premium of $250k plus. This was done via a broker. Understanding the T&Cs was vital to determine the risk vs the premium.

In my original post I was hoping to uncover some real life experiences regarding the risk of having multiple insurers. My experience with a fatal aircraft crash, multiple insurers and 11 years in court to settle the claim have made me a little gun shy of having multiple insurers involved in a single claim.

By the way. As I understand it Allianz owns Ken Tame. This was explained to me last year when I visited the Ken Tame booth at the Perth Caravan show by the resident representative. So there is nobody in the middle battling for the insureds rights in this case.

Cheers John
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Follow Up By: Kenell - Saturday, Jan 05, 2019 at 08:09

Saturday, Jan 05, 2019 at 08:09
Hi John,

Yes I do have industry experience. That doesn't mean I can't come unstuck though and is why I emphasise reading PDSs carefully. I had a breakdown a long way from home last year and my rig had to follow me home on a semi. I thought I knew my policy but before loading up the $50k camper I carefully read the PDS. It fell short of my requirements in that it didn't cover the camper on the truck. The RAC were paying for the recovery and their carrier provided only basic protection. I had to urgently source a cover. How many customers would even bother to check this? I am not letting this rest and may one day report outcomes here.

I separate my car and camper covers although technically the companies are related. My car is insured on a new for old basis regardless of its age. All its accessories and add ons are included and it is covered anywhere in Australia. If I happen to be on a closed road or private property without permission or a track I have made myself I am covered. In all likelihood it would require an emergency or other unusual circumstances for any of these to happen but I don't want to be hung up worrying about it if it does. It also covers damage caused by bad fuel (as opposed to wrong fuel) as most policies do. I pay around $200 more for this policy but I am not bothered about how low they drop my sum insured for obvious reasons.

Although a single accident is likely to involve both towing vehicle and caravan in reality the claims will be settled independently.

Incidentally I am an advocate for the RAC following my breakdown experience and can't speak highly enough of their top level assistance package. If I can't convince my current insurer (who I still have a bit of sway with) to upgrade my policy I will probably head toward the RAC. I can see benefit in having roadside and vehicle protections in one place.

Not sure about Allianz owning Ken Tame but according to their FSG they do have a binder which effectively means they act as the insurer so my advocacy suggestion is limited at best. They also take a commission which indicates to me there is still a degree of separation though.

I would be interested to hear how you go and where you end up and ultimately what influenced your decision.

Ken
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Follow Up By: Member - J&A&KK - Sunday, Jan 06, 2019 at 21:18

Sunday, Jan 06, 2019 at 21:18
Hi Ken

Many thanks for the info. Very useful.

I will keep you informed of my final decision.

Next step is to have a conversation with the current insurer.

Just for the record the following shows the historical values of my current insurance.

Date Premium. Prado Insured Value. KK Insured Value

2015. $1626. $67,500. $88,700
2016. $1707. $67,500. $88,700. Accident & claim in this year
2017. $1723. $60,750. $84,300
2018. $1970. $54,700. $83,000
2019. $2306. $49,200. $82,000

So I was in error in the values shown in my original post but the magnitude of the increase is valid.

Cheers John
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Follow Up By: Member - J&A&KK - Monday, Jan 14, 2019 at 21:17

Monday, Jan 14, 2019 at 21:17
Hi Ken

I ended up going with RAC.

The conversation with the Ken Tame rep was not productive. The reason given for the premium increase was “Cyclone Debbie”. They were not open to any form of premium reduction apart from significant decreases in the sums insured and/or increases in the excess.

The RAC PDS’s were reasonable and the sums insured were equivalent to to the Ken Tame policy. Final premium was $1850 however this included a roadside assistance package that was not included in the KT policy.

So hopefully I have made a reasonable decision. The proof is always in the claims process.

Cheers John

John
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Reply By: Sigmund - Saturday, Jan 05, 2019 at 10:14

Saturday, Jan 05, 2019 at 10:14
Insurers rely on tick and flick at renewal time, so if the premium has jumped get a few other quotes online. They typically offer better deals to get you signed up.
Yes, that's 'real experience'.
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Reply By: Ron N - Sunday, Jan 06, 2019 at 12:17

Sunday, Jan 06, 2019 at 12:17
I think the part that annoys me about insurance is the way premiums creep up, while your insured value goes down.
The worst technique that insurance companies use, is "market value" for the insured value.
This gives them a very substantial leeway in deciding payout values.
I have heard, first-hand, some of the horror stories of fights with insurance companies to try and get payouts that are acceptable, and which doesn't entail loss for the owner.
I always insist on a set value, and rip into companies who then try to subtly change that set value, to "market value", after the initial premium payment.

Cheers, Ron.
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Follow Up By: Member - J&A&KK - Sunday, Jan 06, 2019 at 21:05

Sunday, Jan 06, 2019 at 21:05
Hi Ron

I totally agree on the market value vs agreed value argument. Market value is open to endless argument. One mans junk is another’s treasure!

For me my goods have a certain value and I want to insure them for that value. I will pay the necessary premium and in the event of a claim ( write off) I expect to receive the insured amount.

Cheers John
John
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