State Insurance Company Query/Gripe (Long Read)

[danjah 0]

so i know it's a pretty dry subject but i'm sort of looking to vent here but also to pick you helpful peoples brains as to what you would do in my situation

i was having a discussion with my female friend about car she had recently purchase (02 Wrx) and we got to talking about how much she was paying for insurance on it. She mentioned she pays approx $830 ($76 a month) a year with State for comprehensive insurance to the tune of $18K. Now this amount is almost twice what i pay annually to AA to insure my 97 320 to be insured for 10K! so i went off to the state site to get an online quote and answered the standard questions and it spat out a slightly cheaper price of approx $120 per month...i pay about $150 to AA

So to cut a long story even longer i wondered why the discrepancy could be so large compared to what my friend is paying for a newer, faster and most likely more highly stolen car. At first i thought it was because i'm on restricted but upon querying with friend she mentioned she was on restricted too however when asked the question "how long have you been driving" she gave state an answer of approx 10 years which is probably twice as long as shes actually been licensed for. Now i figure insurance is one thing i definitely do not want to be caught telling porkies about and i'm not willing to risk being blacklisted so i decided to give State a call to find out the reason for differences in prices

Upon calling state i went through the details again with the customer rep who asked me from memory the standard questions regarding my age(27), how long ive been licensed for(approx 2 years), location, whether i had a alarm/immobiliser(yep 5*) and then we came to the utterly confusing part - aftermarket mods. She really went through the works with me and i honestly answered to the best of my knowledge that my car had 17" mags, tints and an aftermarket stereo system. but the bit that absolutely had me scratching my head was she then asked me the approx price of said aftermarket mods second hand! talk about a headf**k, i've only purchased the stereo new and the tints, mags came with the car when i purchased it through private sale which i explained to the rep. She asked me to guestimate how much each of the items would cost second hand, so literally scratching my head i told 40-50% less than what i paid for my stereo/alarm system and told her i had no idea how much to estimate for 17" mags which i couldnt imagine would cost a packet brand new as they are a non leading brand but told her $500 new based on prices i had seen off trademe for a similar product so less than half that second hand. she then wanted to know much my tyres would cost to replace second hand...at which point i started getting a tad frustrated, i've never had to purchase used tyres before but said new the tyres cost me each roughly $250 new (dunlop direzzas) so let her decide what the market price was for used rubber and finally i told her i had tints on the car.

So after this lenghty discussion about what i thought was pretty standard cosmetic mods she pipes up saying that state would not be able to insure my car based on the number of mods i've got! talk about utterly surprised, i was expecting to be told "hey mr danjah is a much cheaper price with us now sign up" instead she's telling me that based on my mods that its too much of a risk for state to insure me and then questioned whether i had disclosed to AA exactly how many mods i had on the car for them to insure me. Of course i've been nothing but truthful to AA and have indeed disclosed all the mods which it had at the time of the car being purchased.

I don't get it? have i just been twatted over by the holy trinity of insurance company dislikes (restricted license, euro car and mods) for them to think my car was more of a risk for them to insure than a 2002 wrx driven by a similar age but female driver? to be far the amount of licensed driving between me and her is about 5 years however the state rep seemed to emphasise that my car would not be licensed because state deemed the mods to be too extreme! She once again mentioned she was surprised that AA insured me and said that i should check with them to exactly what my cover was and that she thought some car club insurance (name slips me now) would be a safer bet as they would cover me for the mods.

So yeah sorry for the novel but i'm pretty confused as to where i've gone wrong. all i can think is perhaps by me being quite honest about my driving status that i've shot myself in the foot? feel free to flame away if you think i'm deluded as whenever i've been telling people at the moment i've been paying in the region of $150 a month for car insurance they generally respond with "OMG! WHY ARE YOU PAYING THAT MUCH!!!"

any tips or advice from anyone who have been in a similar situation, i just want a solid deal on my insurance without lying about crucial info like how long i've been driving etc

p.s: have included pic of car with so called extreme mods

[Mark 178]

Phew... couldn't be arsed reading the whole thing... but didn't you buy your car with those wheels on it? If so, they're not really a "mod". Stock E36's came with 17 inch wheels.

State has been sweet to me, cheapest insurer of all the big companies when I insured my E36 325i. Cost me about $400 a year to insure based on 6 years driving and no accidents in last 5 years. This was when I was 23, I'm now 25.

Your friend may potentially have her insurance under her parent's names as well as her car registered in their name too, perhaps? Call State again for another quote and don't mention your wheels. And only mention your stereo if it's worth more than $1000 (full insurance covers any stereo up to the value of $1000)

[danjah 0]

Phew... couldn't be arsed reading the whole thing... but didn't you buy your car with those wheels on it? If so, they're not really a "mod". Stock E36's came with 17 inch wheels.

State has been sweet to me, cheapest insurer of all the big companies when I insured my E36 325i. Cost me about $400 a year to insure based on 6 years driving and no accidents in last 5 years. This was when I was 23, I'm now 25.

Your friend may potentially have her insurance under her parent's names as well as her car registered in their name too, perhaps? Call State again for another quote and don't mention your wheels. And only mention your stereo if it's worth more than $1000 (full insurance covers any stereo up to the value of $1000)

yeah im thinking the biggest difference in price is due to the fact i've only really been licensed for all of 2 and a bit years.

re: wheels, she asked me if they were stock wheels (aren't those just hub capped type bizzo) and i answered truthfully(stupidly ) that they were aftermarket 17". i just don't want to be caught out in a position if say i do total the car and then they go "oh but you said you had stock wheels and you don't so f**k you". is that not how it works? haha

perhaps i should stop being such an emo about it and just get my bloody full license finally! but still...

p.s: fairly certain friends car is regged and insured under her own name...dunno what gives. your $400 buck insurance policy sounds like a dream to me at this stage!

[hybrid 1039]

Dont feel bad ... AA declined me when my 330i was stock and I was 27. When asked why they said that it was to much of 'expensive' vehicle for my age. I said "So I understand if was under 25 but when do you guys draw the line on age these days?"

Im 31 and with AMI these days.

[Creaver 55]

Haha...I just turned 21, drive a 4L v8, have had 2x driving convictions, full licence...and pay $142/month...this is without a no claims bonus and never being insured before....

Perhaps try pioneer insurance? haha

[MadMurry 0]

With my Altezza I was with Aon NZ - even after turning 25 they were still charging me about $74 a month.

Since my swap to the 330Ci (many AC Schnitzer options) I moved to AMI and they are charging me about $48 a month (only insured for $13k but going to up it to valued $18k - will only cost me $4 a month more). I'm still 25 now.

When they asked me for mods I said none, it's all factory.

Edit: Another cool thing with AMI is that I've currently got 60% no claims bonus, if I maintain this until September I will score 3 claims a year without it affecting my no claims - don't ask me how it works. Will probably have to research it a bit more before I get too comfortable with that idea.

Edited January 7, 2009 by mythan

[danjah 0]

ok so hypothetical situation say if i did total my car and i had told the insurance company that i did not have any mods, would they give me a hard time in paying out the full insured amount of 10K to me? or would they sit there and nitpick through stuff like mag wheels and tints etc. or just lump sum me 10K to go out and purchase a new whip?

perhaps my understanding of how insurance companies is a bit warped tbh.

[Antallica 15]

Sounds like you just need to try another company. I'm thinking AMI for myself.

[Apex 693]

State have a some strange costing system. They charged roughly the same to insure our last 4 vehicles, Toyota Altezza (it was supercharged so I didn’t tick in the section is you vehicle turbo charged) 06 Toyota IST, 06 Holden Astra SRI-T and 05 BMW 545i.

Tell your friend to inform her company that she hasn’t been driving for 10 years if she hasn’t as if her vehicle is stolen under suspicious circumstances (say from a locked garage) that will be found out and they will black list her and possibly do her for fraud, sounds paranoid but I can assure you it happens quite a bit.

[Guest Simon*]

I'm with AMI and have been for years. The 540iS costs me about $400 annually to insure

And Mr Danjah I wouldn't specifically make a big deal about the wheels (especially since you bought the car with them on) nor the tints (not really much of a mod in my opinion).

E: Spelling

Edited January 7, 2009 by Simon*

[danjah 0]

Sounds like you just need to try another company. I'm thinking AMI for myself.

very strange indeed! i have just rung AMI for a quote over the phone and the rep only wanted to know my address, age, car make model and year and original purchase price and quoted me $78 bucks a month for comprehensive!

getting her to send through the quote via email now. she didn't even ask me if i had restricted or full license!

ah well looks like AMI might be the way to go. looking forward to a 50% decrease per month for insurance

[wild_weston 0]

I'm with state and pay $500pa with State (330 valued at $15k and age of 33).

One thing to bear in mind is that in a previous thread there was quite an interesting point on the repair quality difference between insurance companies. It seemed from that thread that State cap the repairers' chargeable amount so the repair quality might be lower than that through other companies (which just pay whatever the repairer charges as long as it is in line with estimates).

State also seems to make you go to certain repairers rather than letting you choose your own.

Personally I haven't needed repairs yet so can't say for sure. Just a thing to bear in mind when comparing different comanies quotes.

[Old_Skool_Bmw 0]

As i have background knowledge in Insurance hopefully I can help explain a few things.

PLEASE remember this is just what I understand things to mean so they might not be 100% correct.

Anything added to the car that was NOT on it when it left the showroom floor (eg different wheels, tints, cd players) are classified as a Modification.. EVEN if it was not YOU that added them..

Example: You buy a car with 17" wheels that are aftermarket wheels but were put on by the previous owner.

Answer = Modification

(in essence is is irrelevant WHO add the wheels, they only look to see if the wheels are factory standard or added after the fact)

Most insurance companies will work out the 'risk' of insurance based on a number of different things.

Normally:

Age, driving experience including licence type, type of car (engine size, turbo non-turbo, where you live, how many tickets you have had, have you lost your licence, blah blah blah) male or female (sometimes) is the car private or business, modifications.

If you look at the 'type' of modifications you have unfortunately most modifications are visual modifications (things that make the car look different that when it left the showroom) and these will normally give you a higher risk.

Example:

- Aftermarket wheels

- Tints

- body kits

- aftermarket lights

- lowered suspension

- fluffy dice etc... etc...

Insurance companies will 'normally' look at the cost of the modifications in relation to the cost of your vehicle (generally market value). If the percentage of modifications is too high in relation to the price of the car the vehicle may become uninsurable.

Example:

Vehicle is worth $10,000 but you have:

$1000 wheels

$1000 stereo

$500 tints

$1000 body kit

In this example 35% of the cars value is modifications and this may be too much, given that the modifications are a high percentage of the cars value and are also visual modifications that change the appearance of the car from it's stock appearance the risk may be too great including your age, type of car etc.

Also remember that comprehensive/full cover does not always mean you will get paid out the INSURED SUM specified on your policy..

If you read the fine print it will 'probably' say you are covered for the MARKET VALUE up to a maximum sum of $$$. (This maximum value is usually the value listed on the insurance policy).

Market value 'may' be taken by getting a few quotes from registered independent assessors as to what the vehicle is work in it's current condition NOT what YOU think it is worth.

Example: You buy a car for $10,000 off Trademe and ring up to insure the vehicle. They ask what it is worth. You tell them you bought it for $10,000 so they $10,000 in the insurance policy, life is good.

HOWEVER you may have paid too much for the car when you bought it and in it's current condition the car might only be worth $8500 Market value given it's high milage, wear and tear, etc etc.

Answer: You get paid out $8,500 market value

OR

Example: You buy a car for $10,000 off Trademe and ring up to insure the vehicle. They ask what it is worth. You tell them you bought it for $10,000 so they $10,000 in the insurance policy, life is good.

HOWEVER you may have scored a wicked as deal on your car and it's market value is ACTUALLY $12,000. Primo, awesome deal..

BUT your insurance only covers you UP to a $10,000 maximum sum as you are paying premiums for a cover of $10,000.

Answer: You get paid out $10,000 NOT the higher market value of $12,000

Insuring your vehicle for an AGREED SUM can be a whole new type of cover and will probably cost you a little more. This is because the insurance company is agreeing to cover the vehicle for an agreed sum and they have no idea how much the vehicle is REALLY worth. Hence, if you get this type of cover you may be required to have the car pre-valued before your insurance cover is accepted.

Please remember that this is just what I recall about insurance policies/cover etc. Things may have changed but I hope you understand a few things about the covers etc.

If you have any queries PM me

Laurence

Edited January 8, 2009 by Old_Skool_Bmw

[MadMurry 0]

Awesome, thanks for that Laurence With my AC Schnitzer kit, since it came like that from the floor as options, I'm all good then?

[greenday-rulz21 4]

Awesome, thanks for that Laurence With my AC Schnitzer kit, since it came like that from the floor as options, I'm all good then?

Anything from the factory is fine.

[rxsumo 33]

Anything from the factory is fine.

I would suggest that you would declare anything that makes your car different from the basic drive out of the showroom specification.

Otherwise, if your car is stolen, and then recovered, and your factory big wheels and bodykit are removed, what chance of getting the bits replaced do you reckon you have?

Especially if those accessories were dealer fitted, rather than factory fitted.

[danjah 0]

cheers for the helpful info Old Skool! spent the weekend moving in to a new flat and rang AA to update my address for insurance stuff and the customer rep said my car insurance fee has been lowered to $92 bucks a month so some savings are definitely coming my way soon. I guess this ain't too shabby as i have disclosed the aftermarket mods on the car at the timeof signing up

Also asked AMI to send me a quote for insuring my car last week also but they don't seem to have gotten around to sending me an email as of yet :|

[Old_Skool_Bmw 0]

no worries hope it helped to clear a few things up

Laurence