MSE News: Drivers face soaring car insurance costs

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Former_MSE_Guy
Former_MSE_Guy Posts: 1,650 Forumite
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edited 10 November 2010 at 4:01PM in Insurance & life assurance
This is the discussion thread for the following MSE News Story:

"Motorists could face double digit insurance price hikes for the foreseeable future, experts told MPs this week."

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  • Percy1983
    Percy1983 Posts: 5,244 Forumite
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    I can see why people don't insure there cars in mnay respects, I remember 7 years ago when I bought my little 1.1 fiesta fpr £1200 and it costs me £1400 to insure it, guess what I never crashed and now have 7 years no claims.

    Even last year my premiums went up £120 cause I am more dangerous now I have 7 years NCB rather than 6!

    Its odd how discrimination is not allowed anywhere buy in insurance its fine.

    As a young male who lives in Oldham I am treated like I WILL crash, now just because I share several phyical features with many other males that does not make me the same as them or them the same as me. Just because I share the same age with many others does that make the same as all of them?

    Discrimination is a socialogical term referring to the prejudicial treatment of an individual based solely on their membership (whether voluntary or involuntary) in a certain group or category.
    Have my first business premises (+4th business) 01/11/2017
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    Officially the owner of my own business since 13/01/2012
  • wizk1
    wizk1 Posts: 911 Forumite
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    I don't understand how increasing premiums will combat the growing number of uninsured drivers. Surely this is just going to exacerbate the problem making the number of drivers without insurance grow exponentially. Putting a stop to these irritating and socially irresponsible claims companies won't go amiss either.
  • dunstonh
    dunstonh Posts: 116,598 Forumite
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    Its odd how discrimination is not allowed anywhere buy in insurance its fine.

    How else would you price it then?

    Should low risk drivers have to pay for the those that are less careful?

    I had my renewal for motor insurance last month and it went down. Insurance is not going up for everyone. Its mainly high risk areas or high risk drivers that are being hit.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • lynsbyns
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    I got my insurance renewal letter this morning and it has increased by £1200. They're expecting me to pay just over £2000 for third party fire and theft. I think that is a complete rip-off. I'm 26, have been driving for two years and have two years no claims. Last year, I was quoted £1400 for my insurance, went on the 'compare' sites and found the same for £840. When I rang my current insurers to cancel the policy, they matched the £840 price. How my insurance can increase to £2000 in one year just doesn't make sense. Increases like that will mean people won't be able to afford to keep their cars, it's crazy.
  • castle96
    castle96 Posts: 2,894 Forumite
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    I remember insuring my first 'car' 2.8 Austin Champ/'Jeep',, at 18, 40 yrs ago, for £48pa (same price/class as Morris Minor. How things have changed !
  • Alison_B
    Alison_B Posts: 2,124 Forumite
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    dunstonh wrote: »
    How else would you price it then?

    Should low risk drivers have to pay for the those that are less careful?

    I had my renewal for motor insurance last month and it went down. Insurance is not going up for everyone. Its mainly high risk areas or high risk drivers that are being hit.


    Not necessarily. You are automatically put in a bracket just because you are male. My nephew had a 1 litre Fiat Seicentoand passed his driving test the same time as my friends daughter. They were both the similar age, lived in the same area and she had a 1.4 Renault Clio. His insurance for the first year was £3,000 whereas hers was £1,400 on a much more powerful car. He has never made a claim whereas she is a bit of party girl and going all over the place, had a can of gloss paint tipped over the car and had to have a full respray, yet, her insurance is pretty much the same as his now.
  • dunstonh
    dunstonh Posts: 116,598 Forumite
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    They're expecting me to pay just over £2000 for third party fire and theft.

    The cross subsidy pool for TPF&T is much lower nowadays. Consequently it can be more expensive to insure on TPF&T than comprehensive.

    its also possible that an increase of that size is because they dont want you any more and hope it will act as a passive blocker for you renewing.
    I remember insuring my first 'car' 2.8 Austin Champ/'Jeep',, at 18, 40 yrs ago, for £48pa (same price/class as Morris Minor. How things have changed !

    Wouldnt that make it more expensive in real terms than the insurance prices today? (i havent got a real price calc to hand but it cant be that far off).
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • mikey72
    mikey72 Posts: 14,680 Forumite
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    wizk1 wrote: »
    I don't understand how increasing premiums will combat the growing number of uninsured drivers. Surely this is just going to exacerbate the problem making the number of drivers without insurance grow exponentially. Putting a stop to these irritating and socially irresponsible claims companies won't go amiss either.

    They can charge as much as they want, as law abiding drivers will pay each year.
    Increasing premiums simply brings in revenue, and profits. Uninured drivers is a good excuse.
    If you consider, say 10 drivers pay for insurance, there's a small profit from 10 drivers, but now 10 people to pay if they claim, and two parties to pay out to each time.
    If only 3 drivers pay for insurance due to cost, they can price whatever they want to keep the same profits, but now only 3 drivers are at risk. They'll have to pay if someone hits them, but only for half the claim at most. The other 7 can hit each other to their hearts content, the insurance don't care.
  • Paulgonnabedebtfree
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    dunstonh wrote: »
    How else would you price it then?

    Should low risk drivers have to pay for the those that are less careful?

    I had my renewal for motor insurance last month and it went down. Insurance is not going up for everyone. Its mainly high risk areas or high risk drivers that are being hit.

    Perhaps mainly is the operative word.
    I have had maximum NCB for some years now yet this year (renewed two weeks ago) I had a 25% hike in premium. I'm a 53 year old male with no driving convictions etc.
    However, I think part of my problem may be that there is less competition for my business. Most companies won't insure vans that have been modified in having a water tank fitted.
  • mandi
    mandi Posts: 11,932 Forumite
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    dunstonh wrote: »

    Should low risk drivers have to pay for the those that are less careful?

    Insurance is not going up for everyone. Its mainly high risk areas or high risk drivers that are being hit.

    I don't think this is the case.

    I have 21 years accident free, drive a small engined car, and my latest renewal quote has gone up by £70.00 . I have searched through all the insurers & can only find it £10,00 cheaper .
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