Car insurance risen 25%!?

Rebob

Ours went up by 75% from £440 to £770! Went online but ended up at the local brokers and got it for £437 :-)

dunstonh

just wondering if anyone had questioned their insurers? Suppose you'd only get the same BS response.

Question them about what?

losgiganteskid

mikey72 wrote: »

(half year, not full year, so 6 months)

Your not just a pretty face are you Mikey :hello:

StevieJ

dunstonh wrote: »

Question them about what?

What about Highway robbery

davidgmmafan

dunstonh can you please stop giving logical responses and facts, its impacting on my ability to get worked up about things without being fully informed which is a hobby of mine.

Thanks.

mikey72

Angelic wrote: »

I don't understand why they are making a loss either. Most people i've known who have had a bump have decided not to claim so their NCB is protected , the amount charged to young people and those who live in "risky" areas mean someone somewhere must be profiting?
Maybe the average policy holder is on charged around £300 ish which doesn't cover stolen vehicles etc...seems mad though when you think about the amount of money insurance companies spend on adverts , famous voiceovers and sponsoring.

I don't understand either. Everyone on here defends the loss making insurers, but their own figures show profits, so there is some good pr and spin about.

dunstonh

I don't understand why they are making a loss either.

Well look into it then and you will understand. The information is there if you want to understand it.

Lets just look at one bit in isolation though. Dont take any notice of the actual figures as its purely to give you an idea. Say an insurer can invest 50% of the premiums which can return 10%, that 10% can be used to go towards keeping the premium down. Now, if an insurer invests 50% of the premium and it loses 10%, they have to make up that shortfall. Insurers typically use long term, lower risk investments but in the credit crunch, these lost more money than normal. Even cash lost money (they dont benefit from the FSCS in the same way consumers do). So, not only do they not have investment returns to provide some profit margin and possible cross subsidy but they also have a hole to fill the losses. How do they fill that hole? They increase the premiums.

Since the credit crunch there has been an aversion to risk. Re-assurers and insurers are having to rebuild their books. They dont want to take risks without charging a suitable risk premium. So, you make the greater risks more expensive or dont offer cover for higher risk or set your price very high to put them off.

You then have claims issues. Fraud always goes up in a recession. It had been going up anyway as society is not as honest as it used to be. Couple that with a range of expensive claims events. You also have issues of claims companies generating increased costs etc etc.

In real terms, car insurance for a low risk individual is still very cheap historically. For high risk individuals it has increased significantly.

seems mad though when you think about the amount of money insurance companies spend on adverts , famous voiceovers and sponsoring.

Cross subsidy and brand awareness cover a lot of that. e.g. if Aviva do an advert for car insurance then it benefits them on pensions, investments and life assurance as well as its all about the brand.

Distribution can still be profitable. The sale of addons etc can help significantly. However, that is just one part of it.

mikey72

danceppy wrote: »

Also cars have been rebanded due to their risk.

I've had the same car for 6 years, why is it rebanded to cost more this year? It doesn't seem riskier to me.

StevieJ

Mine seems to have gone down was 9 (45% up the scale) now 19 (38% up the scale).

StevieJ

I contacted my insurer to cancel insurance renewal, they wouldn't let me go easy, with a slight change in excess they have reduced it to below last years premium (previously up 25%). I am still not sure though, I was quite impressed by LV online when I was applying for a quote, they have an online person to put questions to, they then send you a transcription of the conversation, very neat process.