45% increase in car insurance!!!

jasoo

My mum's car insurance is due for a renewal and her existing insurer have quoted her £440 without any change in her cercumstances. Yet she paid £300 last year. we've looked on line for other quotes and it appears that everyone is giving such high quotes even after increasing excess.
My question is "HAS CAR INSURANCE GENERALLY GONE UP AS MUCH 45%"?. she drives a £3k vaue car and uses it for domestic maximum 1000 miles per year, the car is 10 yrs old bought directly from manufacturer. shes also got maximum non claims etc...

mattymoo

How long has she been with her current insurer? If only one year (so this is the 1st renewal) it might be due to a "new customer" discount offered when the policy was taken out. Direct Line often do this for instance with discounts of 20-40%. You lose that discount at renewal time.

Try getting a quote with the existing insurer, but as a new customer, and see what price you get.

TEDDYRUKSPIN

jasoo wrote: »

My mum's car insurance is due for a renewal and her existing insurer have quoted her £440 without any change in her cercumstances. Yet she paid £300 last year. we've looked on line for other quotes and it appears that everyone is giving such high quotes even after increasing excess.
My question is "HAS CAR INSURANCE GENERALLY GONE UP AS MUCH 45%"?. she drives a £3k vaue car and uses it for domestic maximum 1000 miles per year, the car is 10 yrs old bought directly from manufacturer. shes also got maximum non claims etc...

Actually true. You got it spot on. I quoted insurance from October 2009 and obtained another quote of November 2009. The quote difference was £150. Crazy.

The insurance companies have hiked and maybe due to the flooding in the north west. I might be wrong but this coincidence is too strong.

mattymoo

Topical - this was covered in todays Post Magazine newsletter.
http://www.postonline.co.uk/post/news/1564505/deloitte-issues-gloomy-forecast-uk-motor-market?wt.mc_ev=click&wt.mc_id=E363%7CE9123&wt.seg_1=email%7C%7Cnewsletters%7C%7CPOST%20-%20Insurance%7C%7CDaily%7C%7C03%2F012%2F90%7C%7CDeloitte%20issues%20gloomy%20forecast%20for%20UK%20motor%20market

Deloitte issues gloomy forecast for UK motor market

Premiums need to raise 5% to replace lower investment returns.
Post | 03 Dec 2009 | 08:37
Deloitte predicts that the £12 bn motor insurance industry is set to make insurance losses in 2009 and 2010, the first time since 2000.

Further, Deloitte estimates that motor insurers would need to raise their premiums by 5% to replace the income lost from lower investment returns.
James Rakow, insurance associate partner at Deloitte, commented: "Results at a headline level for UK motor insurers have shown this market cruising along at close to underwriting breakeven point from 2001 to 2007. In 2008, the latest year for which results are available, the headline net operating ratio was 105%.
"In other words motor insurers were making an underwriting loss of £5 for every £100 of premium. In 2008 investment market conditions were good enough for insurers to recoup this underwriting loss and make a small insurance profit. In 2009 I don't think that insurers will be able to rely on investment performance to save them from making a loss."
Deloitte's analysis also found that without support from prior year reserve releases 2009 could see underwriting losses of around £1 billion.
Mr Rakow added: "Looking beneath the likely headline result for 2009, the picture is even worse for motor insurers. Indications are that the current year trading is far from being profitable at a market level and this is likely to remain the case in 2010. For the last few years prior year reserve releases have been at exceptionally high levels.
"I do not expect to see anything other than modest levels of reserve releases in 2009."
The latest figures from Deloitte's Motor Premium index show that motor premiums are increasing at their fastest rate since the index began in 2003. The index measured an increase in premiums for comprehensive cover of 11% for the year to September 2009 and 4% over the quarter.
Mr Rakow concluded: "One piece of positive news for motor insurers is that there is now strong evidence in the market that motor premiums are on the increase. This is not such good news for consumers who may find it increasingly difficult to shop around for a cheaper premium at renewal. With lower investment returns and the prospect of only modest support from prior year reserve releases insurers have had to look to premium increases to improve their results."

raskazz

TEDDYRUKSPIN wrote: »

Actually true. You got it spot on. I quoted insurance from October 2009 and obtained another quote of November 2009. The quote difference was £150. Crazy.

The insurance companies have hiked and maybe due to the flooding in the north west. I might be wrong but this coincidence is too strong.

The flooding in the Northwest is a localised problem and in any case the true liabilities arising from it will not be certain so soon after the event.

The real reason is what mattymoo posted - too many motor insurers are loss-making in the private car market and this is not sustainable.

Quote

It's the endless stream of comparison website adverts which make people think insurance should go down in price every year. Why should it? Not everything does.

The inevitability of a type of vehicle being involved in more claims is a fact. And insurers pay our for claims. So insuring a vehicle shouldn't necessarily go down each year.

Increase the mileage. That's my tip. Disclosing 1,000 miles a year probably isn't doing your Mum many favours.