A 2009 rise of almost 20% in car insurance premiums could be followed by a further hike of 15% in 2010, according to Consumer Intelligence.
The market research firm puts the current average annual premium at £564.19, with 17 to 24-year-olds bearing the brunt of last year’s increase, at almost 25%.
For this age group a typical annual premium stands at £1,489 while for the 65s and over the rise has been around 15% to £423.
Best placed are 55 to 64-year-olds who pay around £376 a year to insure their vehicles.
Consumer Intelligence spokesman, Ian Hughes, believes upward pressure on pricing has “well and truly broken through”, despite the influence of price comparison websites.
He is concerned that the trend could encourage more motorists to drive uninsured and with an estimated 1.6 million uninsured drivers already on UK roads, the £30 per year penalty paid by legal car owners to compensate the victims of uninsured drivers may not be enough.
Earlier this month, Zurich announced that it will be increasing motor insurance premiums by up to one-fifth from March because of a rise in third party and personal injury claims.
The insurer said the current market is unsustainable.
In addition, EMB recently reported that motor insurer results for 2009 are even worse than feared.
Research by the actuarial firm revealed that combined loss ratios for the private and commercial motor insurance market are set to exceed 115%.
Friday, January 29, 2010
Prepare for a shock if it's time to renew your car insurance
Car insurance costs climbed 7.2 per cent in the last three months of 2009, their biggest-ever quarterly rise, according to the AA's British Insurance Premium Index. Over the year, average motor premiums soared 18 per cent. The rise left the average comprehensive policy above £1,000 for the first time.
"There is no sign of premiums easing," warns Simon Douglas, director of AA Insurance. "We will continue to see increases over the coming year."
Last week Zurich said it will be increasing the cost of its premiums by a fifth in 2010 and there is likely to be more bad news for motorists ahead.
"Other insurers will follow Zurich's lead," says Will Thomas, head of car insurance at Confused.com. "Pricing has had to change due to a number of factors, not least the year-on-year increase in personal injury claims brought on by the new breed of litigation-savvy motorists assailed by ambulance-chasing injury lawyer adverts on the television."
Esure says it has experienced a notable increase in the number of drivers making false or exaggerated insurance claims. It says there has been a marked increase in people simply making up a theft or deliberately writing off a car to get a cash settlement. Others have been caught inflating claims by repairing completely unrelated damage on a vehicle such as repairs to expensive gear box systems or ad hoc electrical faults as part of a minor, unrelated collision. In short, people yielding to the temptation to cheat their insurer are costing us all in higher premiums.
There's another factor forcing up the cost of cover, according to Thomas. He says the trend of recent times when motor insurers were happy to cut profits to attract customers is over. "With increasing costs, that tactic is proving unsustainable, and many insurers are now looking for a new, more profitable way to do business which is being seen in an increase in premiums."
January and February are the most popular months for people to renew their car cover but with increased premiums across the board, playing different insurers off against each other is essential if you don't want to pay more than you need to.
Emboldend by our case study below – Sharon Alston saved two-thirds of the cost of cover – I decided to challenge my insurer's renewal charge of around £360. Five minutes on an insurance comparison site yielded a quote of £220, a third less. When I reported this to my insurer, it immediately agreed to match the lower rate.
"Anyone automatically renewing could be in for a shock when their quote comes through," says Thomas. "The only defence against this is to get online and shop around for the best price. Apathy is not an option for those looking for a good deal."
How else can you cut the cost of insurance? Cutting your mileage will reduce the price. "If you limit your mileage you can reduce your premiums," says Lana Clements of More Than. "It's even worth thinking about investing in a bicycle and using it for the shorter journeys that you have previously been making by car."
The next step is keeping your car safe. "Insurers look at the risk every driver presents, so you'll get a better deal if you can reduce that risk," explains Steve Sweeney, head of motor insurance at moneysupermarket.com. "By keeping your car off the road at night in a garage or on a drive you make it safer, meaning your premiums will come down."
By the same token, ensuring you have an alarm and immobiliser on your motor will help. Changing the terms of your cover can also reduce the bill. Agreeing to pay a higher excess – the amount of any claim you agree to pay – will reduce your premiums, although agreeing too high an excess will hit your pocket hard if you're forced to splash out hundreds after an accident.
Keeping an eye out for good deals is also worthwhile. On Monday, for instance, a new insurer – AXA Car Insurance – will offer up to 90 per cent no claims discount. "At a time when prices are rising sharply we felt that drivers with a proven track record deserved more," says Tina Shortle of AXA. However, you'll need to have been claim-free for eight years to qualify for the top rate of discount. Meanwhile, BMW Car Insurance is giving 52 days' worth of free cover with its annual comprehensive policies until the end of March.
"There is no sign of premiums easing," warns Simon Douglas, director of AA Insurance. "We will continue to see increases over the coming year."Last week Zurich said it will be increasing the cost of its premiums by a fifth in 2010 and there is likely to be more bad news for motorists ahead.
"Other insurers will follow Zurich's lead," says Will Thomas, head of car insurance at Confused.com. "Pricing has had to change due to a number of factors, not least the year-on-year increase in personal injury claims brought on by the new breed of litigation-savvy motorists assailed by ambulance-chasing injury lawyer adverts on the television."
Esure says it has experienced a notable increase in the number of drivers making false or exaggerated insurance claims. It says there has been a marked increase in people simply making up a theft or deliberately writing off a car to get a cash settlement. Others have been caught inflating claims by repairing completely unrelated damage on a vehicle such as repairs to expensive gear box systems or ad hoc electrical faults as part of a minor, unrelated collision. In short, people yielding to the temptation to cheat their insurer are costing us all in higher premiums.
There's another factor forcing up the cost of cover, according to Thomas. He says the trend of recent times when motor insurers were happy to cut profits to attract customers is over. "With increasing costs, that tactic is proving unsustainable, and many insurers are now looking for a new, more profitable way to do business which is being seen in an increase in premiums."
January and February are the most popular months for people to renew their car cover but with increased premiums across the board, playing different insurers off against each other is essential if you don't want to pay more than you need to.
Emboldend by our case study below – Sharon Alston saved two-thirds of the cost of cover – I decided to challenge my insurer's renewal charge of around £360. Five minutes on an insurance comparison site yielded a quote of £220, a third less. When I reported this to my insurer, it immediately agreed to match the lower rate.
"Anyone automatically renewing could be in for a shock when their quote comes through," says Thomas. "The only defence against this is to get online and shop around for the best price. Apathy is not an option for those looking for a good deal."
How else can you cut the cost of insurance? Cutting your mileage will reduce the price. "If you limit your mileage you can reduce your premiums," says Lana Clements of More Than. "It's even worth thinking about investing in a bicycle and using it for the shorter journeys that you have previously been making by car."
The next step is keeping your car safe. "Insurers look at the risk every driver presents, so you'll get a better deal if you can reduce that risk," explains Steve Sweeney, head of motor insurance at moneysupermarket.com. "By keeping your car off the road at night in a garage or on a drive you make it safer, meaning your premiums will come down."
By the same token, ensuring you have an alarm and immobiliser on your motor will help. Changing the terms of your cover can also reduce the bill. Agreeing to pay a higher excess – the amount of any claim you agree to pay – will reduce your premiums, although agreeing too high an excess will hit your pocket hard if you're forced to splash out hundreds after an accident.
Keeping an eye out for good deals is also worthwhile. On Monday, for instance, a new insurer – AXA Car Insurance – will offer up to 90 per cent no claims discount. "At a time when prices are rising sharply we felt that drivers with a proven track record deserved more," says Tina Shortle of AXA. However, you'll need to have been claim-free for eight years to qualify for the top rate of discount. Meanwhile, BMW Car Insurance is giving 52 days' worth of free cover with its annual comprehensive policies until the end of March.
Over-80s refused car insurance
Motorists over 80 years old are being denied car insurance quotes, according to new research by Age Concern and Help the Aged.
Half of motor insurance companies will not provide car insurance to drivers aged over 80, their investigation found.
A significant number of insurers refused to provide quotes for any driver over the age of 65.
The offending companies include household names such as Zurich, AXA, and Aviva.
Age Concern and Help the Aged said denying insurance cover to older drivers irrespective of their health is age discrimination and puts unacceptable restrictions on people’s lives.
Being refused car insurance can mean people are prevented from visiting family and friends.
“It beggars belief that in 2010 a business is still able to refuse to deal with someone because of the date on their birth certificate,” said Andrew Harrop, head of public policy at Age Concern and Help the Aged.
“The insurance industry must wake up to the fact that more of us than ever are living longer, healthier and more active lives.
“Continuing to discriminate against our ageing population is not only bad for older people, it is bad for business.”
Half of motor insurance companies will not provide car insurance to drivers aged over 80, their investigation found.
A significant number of insurers refused to provide quotes for any driver over the age of 65.
The offending companies include household names such as Zurich, AXA, and Aviva.
Age Concern and Help the Aged said denying insurance cover to older drivers irrespective of their health is age discrimination and puts unacceptable restrictions on people’s lives.
Being refused car insurance can mean people are prevented from visiting family and friends.
“It beggars belief that in 2010 a business is still able to refuse to deal with someone because of the date on their birth certificate,” said Andrew Harrop, head of public policy at Age Concern and Help the Aged.
“The insurance industry must wake up to the fact that more of us than ever are living longer, healthier and more active lives.
“Continuing to discriminate against our ageing population is not only bad for older people, it is bad for business.”
Sunday, January 10, 2010
Car insurance and car tax on the increase
Sainsbury's Finance has released new figures which show that car insurance costs have increased by nearly 13% this year. With average driver spending up to £1,300 each year, UK motorists will now have to pay even more when it comes to covering the cost of running a car - something that many people just can't do without.
Car insurance can't be scrimped on, despite these cost-cutting times, as driving uninsured is not only illegal, but it can fuel big repair bills in the long term. As the recession bites, there has also been an increase in theft from vehicles, especially those that house pricey gadgets such as SatNav, so it's important to keep up-to-date on policy payments.
Unfortunately for drivers, insurance is only the start of the price increases – car tax is also sky rocketing too, rising by a hefty 8% in comparison to last year. It's recommended that motorists shop around when looking for car insurance, as there are good deals out there than can save money – some even come with additional savings and incentives on top. Using a comparison site is a great way to do this, making it even easier to get a great package suited to your personal needs while ensuring you don't miss out on other deals at the same time.
Car insurance can't be scrimped on, despite these cost-cutting times, as driving uninsured is not only illegal, but it can fuel big repair bills in the long term. As the recession bites, there has also been an increase in theft from vehicles, especially those that house pricey gadgets such as SatNav, so it's important to keep up-to-date on policy payments.
Unfortunately for drivers, insurance is only the start of the price increases – car tax is also sky rocketing too, rising by a hefty 8% in comparison to last year. It's recommended that motorists shop around when looking for car insurance, as there are good deals out there than can save money – some even come with additional savings and incentives on top. Using a comparison site is a great way to do this, making it even easier to get a great package suited to your personal needs while ensuring you don't miss out on other deals at the same time.
The good news about pricier car insurance
Auto insurance companies did not make a profit in New Jersey in 2008 as they battled for customers, one factor that is causing drivers to pay higher rates after several years of declines, according to state and industry sources.
After five years of double-digit profits, insurance companies here flatlined in 2008, down from a 10.1 percent profit in 2007, according to the Auto Insurance Report, released tomorrow.
After five years of double-digit profits, insurance companies here flatlined in 2008, down from a 10.1 percent profit in 2007, according to the Auto Insurance Report, released tomorrow.
Car Insurance firm advise motorists this Winter
As the big freeze grips the country, de-icing the car in the morning can become quite a chore which is why so many drivers leave their vehicle unattended and running while they nip back into the warm. The Association of British Insurers (ABI) has tapped into this and released new guidelines for motorists who are concerned about the safety of their cars.
One of the biggest problems during this time of year is opportunist thieves who spot unattended vehicles and take a chance. In order to avoid the loss of vehicles and belongings, the ABI has recommended that driver’s stay inside their cars while it warms up and the windows clear.
The latest information comes hot on the heels of the shocking revelation that 27 cars had been stolen in just two hours as drivers left their vehicles unattended in this manner. The sudden crimewave took place in Lancashire, but it’s a countrywide problem.
Nick Starling, Director of General Insurance, explained that while the cold weather may put motorists off when it comes to hanging around outside, it certainly doesn’t bother would-be thieves!
“It only takes seconds for thieves to strike. Stay with your vehicle while it warms up, so that it’s you that drives away in a warm car, not a thief” he said.
One of the biggest problems during this time of year is opportunist thieves who spot unattended vehicles and take a chance. In order to avoid the loss of vehicles and belongings, the ABI has recommended that driver’s stay inside their cars while it warms up and the windows clear.
The latest information comes hot on the heels of the shocking revelation that 27 cars had been stolen in just two hours as drivers left their vehicles unattended in this manner. The sudden crimewave took place in Lancashire, but it’s a countrywide problem.
Nick Starling, Director of General Insurance, explained that while the cold weather may put motorists off when it comes to hanging around outside, it certainly doesn’t bother would-be thieves!
“It only takes seconds for thieves to strike. Stay with your vehicle while it warms up, so that it’s you that drives away in a warm car, not a thief” he said.
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