Car Insurance Renewal Increases

willpower_2

I have just received the renewal advise on my car insurance. I noticed that it has increased by 21% compared to what I payed last year :mad:.

What is the justification for increases above inflation when:

1. I have not made a claim or had any convictions in the previous insurance period.
2. My car is a year older and in the event of a total loss claim the insurance company would pay out less than the previous year
3. As my car is now a year older it is less desirable to theives (as they would get less for selling the car) and joy riders would not want to be seen in an older car (you would think!)

raskazz

There have been many threads regarding this recently.

However, I would point out that your premium has not increased 'above inflation'. It has increased in line with inflation for that particular product.

_Andy_

There doesn't have to be a 'justification' - they are there to make profit not be charitable.

dunstonh

What is the justification for increases above inflation when:

No justification needed but they have it. Plus, why do you think its above inflation? Its certainly not above insurance inflation.

1. I have not made a claim or had any convictions in the previous insurance period.
2. My car is a year older and in the event of a total loss claim the insurance company would pay out less than the previous year
3. As my car is now a year older it is less desirable to theives (as they would get less for selling the car) and joy riders would not want to be seen in an older car (you would think!)

Thats all about you. You dont matter in the scheme of things. Its the external issuse that have hit prices (see all the recent threads asking the same questions and getting the same answers).

However, your car is now a year older and a little bit less reliable and more likely to be in an accident. Also, the age of your car doenst matter if you happen to hit a brand new £60,000 car and write that off as well as injure others in the process. Older cars are often more desirable to thieves as they are easier to break into. Especially for opportunistic joy riders.

payless

was last year policy new business ( or quoted to match new business rates) ..
this is where inertia comes into play... quote cheap to get new business, renewal rates to claw back the profit

bouncydog1

Motor insurance costs have gone up quite a bit this year. Reasons:

Return on insurers investments has reduced due to general recession (think about returns for savers);
Reinsurance costs have increased (insurers decide how much risk they wish to retain and then purchase reinsurance in excess of that risk, so that they do not have an unlimited exposure);
Claims costs have increased (think labour rates and costs of spares);
Higher third party claims (think publicised court awards etc - one person on here last week mentioned a claim that was fast approaching £1m - not hard if you injure a person with several dependants, particulary if a high flyer with a bright future ahead of him);
Insurers are reviewing postcodes and increasing rates where they have higher claims - in some cases refusing to insure at all.

You are a small fish in a large pool and your rates are affected by the loss experience of all of the other fish.

Try shopping around for a cheaper rate using advice posted on here but make sure you disclose all material facts (and if you are not sure if it is material, disclose it anyway) as non-disclosure can lead to cancellation of your policy. If an insurer cancels this can also lead to problems with insurance in other areas e.g. household, all risks etc.