MSE News: Car insurance prices 'to soar by 25% this year' – check yours now

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The cost of car insurance policies could rise by up to 25% in 2016, according to the AA, after 20% rises in 2015. But there are ways to lock in a cheap price now, even if you're not at renewal...
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'Car insurance prices 'to soar by 25% this year' – check yours now'
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  • fromtheshires
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    Car insurance will only keep going up as long as whipcash claims are being paid out. The article speaks for itself when 11% of people think its acceptable to claim when no injury was suffered. My car was written off for me and all anyone was interested in was if I was claiming for injury (which I didnt) or not.
  • dacouch
    dacouch Posts: 21,637 Forumite
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    Recessions without fail always increase Insurance Premiums...
  • OnanTheBarbarian
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    The insurers are the villains in this story. Don't believe all the BS about this just being about whiplash claims.

    What gets my goat is the utter laziness of the British press, who are just happy to keep copying and pasting the propaganda sent to them in the press releases from the UK insurance industry.

    The stories are repeated with such frequency that the wooden tops reading the articles believe it.

    The only winners in this saga will be the insurance industry who are likely to see upwards of £1bn increase in profits.

    The government have already admitted nobody is going to actually police if the insurance industry and whether we all end up £50 better off once they have finished allowing the UK insurance industry to buy the legislative change that will pee all over established legal principles that form part of UK laws.

    It's amazing what £9m in tory party donations get you!

    Be careful what you wish for when you can't take action for a broken arm without losing 25% of your damages. This won't just apply to road accidents.
  • Zebrdee
    Zebrdee Posts: 225 Forumite
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    I was going to comment on the MSE article in the right hand column but couldn't log on with my MSE username, just social media. Anyway found this now. I must be a 'woodentop' as I read we should expect a £50 drop not a 25% increase in 2016. I was surprised that my car insurance has gone up 11% this year as I'm older and so is my car.

    Should I haggle?
  • dacouch
    dacouch Posts: 21,637 Forumite
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    Zebrdee wrote: »
    I was going to comment on the MSE article in the right hand column but couldn't log on with my MSE username, just social media. Anyway found this now. I must be a 'woodentop' as I read we should expect a £50 drop not a 25% increase in 2016. I was surprised that my car insurance has gone up 11% this year as I'm older and so is my car.

    Should I haggle?

    Yes, but remember some of the increase is due to the government increasing the tax they levy on Insurance products
  • Crazy_Jamie
    Crazy_Jamie Posts: 2,246 Forumite
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    Car insurance will only keep going up as long as whipcash claims are being paid out.
    Utter nonsense. As Onan has already said, this rhetoric of whiplash claims being the primary problem with insurance premiums is baseless rubbish. Changes were actually introduced in April 2013 aimed at significantly reducing the cost of litigation involving whiplash claims, which they did, and in addition to that referral fees were also banned, the aim being to make it more difficult for Claimant solicitors to get hold of claims in such volume. When those changes were brought in the insurance industry promised that it would result in a £90 drop to all insurance premiums.

    Of course, not only has that reduction not materialised, but in fact insurance premiums are continuing to rise. All the while the insurance companies somehow manage to maintain this incredible lie that this is all caused by insurance fraud and 'compensation culture', which it simply isn't. The legal costs involved in simple road traffic accident whiplash claims where there is no dispute as to liability are now literally about one seventh of what they were prior to April 2013. Costs associated with those claims have dropped significantly, yet the media and the government continue to target genuinely injured Claimants as the villains of the piece.

    The reality is that the insurance companies are stringing everyone along having bought the support of the government through donations. The average motorists doesn't care, of course, and nor will the average motorist notice that their insurance premiums continue to go up even after whiplash claims are essentially banned. Instead when you find yourself rear ended and suffering pain for the best part of a year after the accident, you'll discover that you can no longer claim for those injuries due to changes brought in on a wave of public support.

    I don't think I've ever quoted Star Wars in this forum before, but the quote "so this is how democracy dies, with thunderous applause" is somewhat apt. The proposed changes to whiplash claims and the small claims limit will likely have great public support due to the propaganda surrounding them, but in fact all they do is erode the average person's fundamental right to be compensated when suffering loss due to the negligence of another. You will receive no benefit from these changes in reality, but should you find yourself in need of that right in future, you will most certainly curse the fact that it is no longer there.
    "MIND IF I USE YOUR PHONE? IF WORD GETS OUT THAT
    I'M MISSING FIVE HUNDRED GIRLS WILL KILL THEMSELVES."
  • SailorSam
    SailorSam Posts: 22,754 Forumite
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    They were talking to someone on R4 this lunchtime about the increase in car insurance and he said one of the reasons was 'cos of the fall in petrol prices. This led to people driving more, and with more driving came more accidents.
    Liverpool is one of the wonders of Britain,
    What it may grow to in time, I know not what.

    Daniel Defoe: 1725.
  • zagfles
    zagfles Posts: 20,357 Forumite
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    Utter nonsense. As Onan has already said, this rhetoric of whiplash claims being the primary problem with insurance premiums is baseless rubbish. Changes were actually introduced in April 2013 aimed at significantly reducing the cost of litigation involving whiplash claims, which they did, and in addition to that referral fees were also banned, the aim being to make it more difficult for Claimant solicitors to get hold of claims in such volume. When those changes were brought in the insurance industry promised that it would result in a £90 drop to all insurance premiums.

    Of course, not only has that reduction not materialised, but in fact insurance premiums are continuing to rise. All the while the insurance companies somehow manage to maintain this incredible lie that this is all caused by insurance fraud and 'compensation culture', which it simply isn't. The legal costs involved in simple road traffic accident whiplash claims where there is no dispute as to liability are now literally about one seventh of what they were prior to April 2013. Costs associated with those claims have dropped significantly, yet the media and the government continue to target genuinely injured Claimants as the villains of the piece.

    The reality is that the insurance companies are stringing everyone along having bought the support of the government through donations. The average motorists doesn't care, of course, and nor will the average motorist notice that their insurance premiums continue to go up even after whiplash claims are essentially banned. Instead when you find yourself rear ended and suffering pain for the best part of a year after the accident, you'll discover that you can no longer claim for those injuries due to changes brought in on a wave of public support.

    I don't think I've ever quoted Star Wars in this forum before, but the quote "so this is how democracy dies, with thunderous applause" is somewhat apt. The proposed changes to whiplash claims and the small claims limit will likely have great public support due to the propaganda surrounding them, but in fact all they do is erode the average person's fundamental right to be compensated when suffering loss due to the negligence of another. You will receive no benefit from these changes in reality, but should you find yourself in need of that right in future, you will most certainly curse the fact that it is no longer there.
    So we're all to believe this is a big conspiracy by greedy insurance companies to raise their profits are we? Really? None will take advantage of these supposedly lower costs by undercutting all the others?

    Sounds like drivel propagate by those with a vested interest, like ambulance chasing lawyers and claims management companies. It seems they're finding ways round the 2013 changes...
    http://www.telegraph.co.uk/finance/personalfinance/insurance/motorinsurance/11795162/Return-of-whiplash-scandal-to-add-15-to-car-insurance-costs.html

    This article is also interesting...

    http://www.ft.com/cms/s/0/518ccb14-ac8b-11e5-b46e-3ef837cafba3.html#axzz3y67qSWCF

    Strange how the French seems to hardly ever get whiplash or soft tissue injuries in road traffic accidents whereas the British seem very prone to it. Maybe all that red wine, garlic and olive oil protects them :rotfl:
  • zagfles
    zagfles Posts: 20,357 Forumite
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    dacouch wrote: »
    Yes, but remember some of the increase is due to the government increasing the tax they levy on Insurance products
    Yes although that only adds a bit over 3%.
  • dacouch
    dacouch Posts: 21,637 Forumite
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    SailorSam wrote: »
    They were talking to someone on R4 this lunchtime about the increase in car insurance and he said one of the reasons was 'cos of the fall in petrol prices. This led to people driving more, and with more driving came more accidents.

    That will have a small impact.

    The fall in oil prices and the resultant crash in world markets will have a fairly major impact in premiums though. Insurers tend to pay out more in claims than they receive in premiums. They traditionally make their money from investing the money.

    The crash in the markets and what looks like a coming recession will have an impact on Insurers investment returns and thus they will increase premiums.

    It's a double whammy as they're now required to hold a lot more of their money as liquid cash and / or very low risk investments to protect themselves from large catastrophes and / or crashes in the market. So the drop in value in the physical buildings they own eg shopping centres etc and their other investments mean they have to increase their cash reserves at the expense of their other investments.

    The result of the contraction in their investments and increase cash reserves means Insurers are unable to accept so many customers. This means the market moves from a buyers market to a sellers market as the Insurers become more picky with the customers they accept and they charge a higher premium for the customers they accept.

    It's how the Insurance market has always performed, it's called a hard and soft market. We've been in a soft market due to good investment returns which results in new Insurers entering the market which force the premiums down. When a recession or catastrophe hits eg 9/11 you enter a Hard Market and capacity reduces, Insurers pull out of the markets and premiums go up.

    It works in a circle though as the premiums go up in the hard market, it attracts new Insurers into the market and investments tend to pick up as you move out of a recession. This completes the circle by forcing premiums down and you return to a Soft Market until the next trigger event
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