Massive car premium hike. Why?

KMK

My son is trying to renew his car insurance. He is 28, a homeowner, lives in Stockport and has a Kaa which is 2 years old. He has 8 years no claims bonus. Last year he paid a premium of £366 but this year the comparison sites are all quoting around £480 for the same policy conditions ( ie no courtesy car/no RAC etc) He has not made any claims in the past year.

When he asks why the premium has gone up so steeply, they say that Stockport might be a risky area but nothing concrete is suggested to justify the hike in price.

Are others having similar experiences?

Lee22

Yes I have too - received my renewal premium yesterday which is £110 more than last year (no claims, convictions etc). From reading the forums though it seems all too common!

bouncydog1

Have a read through many of the posts on here to see why lots of people's premiums have gone up. Could be insurers have had lots of claims from that area. Why doesn't your son try a broker to see what they can do?

dunstonh

Yes.... see all the recent threads on the same subject. Most of which gives the reasons if you cant already work it out for yourself.

The_Broker_2

Insurers have been losing money on car insurance for years. The premium have been due to go up for some time now. It will continue for a while yet

BonBon_3

It is appalling. They are a bunch of rogues.

I have just moved from Tesco Insurance after being with them for over 10 years as they had become so uncompetitive. Their customer Service has deteriorated too.

There are alternatives and they can be much cheaper. A couple of hours in the internet was the most valuable two hours spent. I moved and saved over £100.

You might find this link useful.

http://www.moneysavingcarinsurance.co.uk

My advice is negotiate hard - it works!

Good luck.

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The_Broker_2

KMK didn't mention an insurer, so who are bunch of rogues? Are you on about the whole insurance industry?

Just because someone puts their price up doesn't mean anyone is being ripped off. You're quitefree to look around and move elsewhere if you choose.

Car insurance is generally quite cheap just now. It WILL increase over the next few years

bouncydog1

"It is appalling. They are a bunch of rogues".

Rather a sweeping statement don't you think? What people seem to forget is that you can often make savings on your insurance by shopping around - that is because you are new business to the new insurer and they want to get you through the door to replace everyone else who has made savings by shopping around! There is no guarantee that saving will be continued into the second and subsequent years of your policy (see lots of posts on insurance premiums rising).

As has been stated many, many times before on this site - insurance is a business - there to make a profit for the benefit of the shareholders. Many insurers have lost money on their motor accounts in recent years due to increases in both valid and fraudulent claims. This results in them either having to put up their premiums or be more selective in who they underwrite.

Good luck if you can save money - only thing I would caution is make sure it is on a "like for like" basis with what you are cancelling. It would be a shame to see you reappear on here after a claim in a few months objecting to the fact that your policy doesn't cover something you thought it did. We see many posts of that nature on here so it is not a pop at you personally.

dunstonh

It is appalling. They are a bunch of rogues.

With car insurance in general making a loss, they cant be very good rogues.

Also, its not as if they are not telling you the cost and then forcing you to have it. They tell you what their price is and you get to choose whether you accept that or shop around.

A couple of hours in the internet was the most valuable two hours spent. I moved and saved over £100.

Was that all? It wasnt that much different and you call them rogues? I would hate to see what you call other professions where the differences will be far greater.

BonBon_3

Ok I'll withdraw that - they are not a bunch of rogues (well not all of them).

But....

.... don't ever start feeling sorry for the poor insurance companies and underwriters who have a captive market of customers who must insure a vehicle - by law. Great business model! lol

Seriously though,

the problem is not the poor law abiding motorists, but the alledged 2 million uninsured on the road who 'we are all paying for'.

dunstonh

.... don't ever start feeling sorry for the poor insurance companies and underwriters who have a captive market of customers who must insure a vehicle - by law. Great business model! lol

Losing money is not a great business model. Car insurance requires the cross subsidy of investment returns and bolt on sales to make it profitable. A great business model would be one that is profitable without those.

the problem is not the poor law abiding motorists, but the alledged 2 million uninsured on the road who 'we are all paying for'.

Agreed. Personally, I think the penalties for them should be far higher. If the courts just end up fining them a figure that is less than the cost of insurance then its a pointless exercise. You dont have to lock them up. Obviously losing a £500 car and getting a £1000 fine is not enough. Start banning them from driving. Make it easier for the costs of an accident to be reclaimed from their personal assets. Make the consequences of crime a disincentive to do it rather than an incentive as it currently is.