No point to points anxiety

Newspapers can be strange entities. Even those that pride themselves on being impartial and measured frequently aren’t. What significance a story is given will depend very much on what’s going on that day, what the publication’s attitude is to the current government and what it believes to be populist right now.

Sometimes a government or an individual politician can find itself so deeply unpopular that there is literally nothing it can say or do that would not be spun negatively by the press. A government could announce that all school children will be given a free iPad with all of their books on it, only to read the next day that the wicked Government is driving book shops out of business.

I don’t know whether you love the government or hate them or somewhere in between but I would advise that you keep an eye out for this sort of spin and take almost everything that you see or read with some degree of scepticism.

There was a fairly benign example this week when it emerged that the Government was preparing to change the rules for insurance companies to allow them to see not only how many penalty points you have but also what you got them for.

At the moment the insurer can check on a database and see that a driver has four points, for example. But they cannot tell the difference between someone who got four points by committing a simple minor offence once and losing a court challenge or someone who has been caught twice driving the wrong way down a motorway.

Needless to say there is a material difference between the two when it comes to risk.

A broadsheet that takes particular pride in its even-handedness began its article with the phrase that this measure ‘is likely to see many motorists pay bigger premiums’. Is it indeed? It may do, but that will only happen if an insurer is also able to charge someone else a reduced amount.

Even so the article set the tone for the coverage. Morning radio wanted to talk to me about it and our press office was busy all day. We found ourselves responding to AA Members and Insurance customers wanting to know about this latest scam for charging us more.

There are plenty of scams out there but this isn’t one of them. We are more likely to spot them coming if we don't react with quite the same instant cynicism every single time.

On the measure itself, in my view it is in fact a perfectly sensible idea. There will be 13 offences that are classed as serious and if you get points for any of them then this will become visible to any insurance company when you buy motor insurance.

At the moment there are nearly half a million motorists who have at least one penalty point on their record. This is about 18 per cent or so of all licenced drivers.

The good news is that relatively few have multiple points. In fact it is remarkable but excellent to see that in statistical terms a driver is more likely to move from zero to two points than they are to move from two to four or six. The system of warnings is effective.

Still, there are a huge number of people with points and it does not make much sense to treat them as a single category. Allowing insurers to see whether you have an intractable habit of phone use might allow them to refine their categorisation.

This is not actually new in that it was contained in legislation from 2010 but it will start happening during 2013.

The more accurately an insurance company can assess risk the more likely they are to charge fairly. They may still fall short of that standard sometimes and come in for criticism but at least proper knowledge gives them the chance to do it properly.

Sometimes, despite all the efforts at spin, a simple measure is just what it appears to be and nothing more.

 

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