MSE News: Drivers face further insurance price hikes as insurers backtrack on promise

edited 30 November -1 at 1:00AM in Insurance & Life Assurance
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edited 30 November -1 at 1:00AM in Insurance & Life Assurance
Car cover premiums are expected to rise after insurers backtracked on previous promises to reduce rates...
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'Drivers face further insurance price hikes as insurers backtrack on premium reduction promise'
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  • Crazy_JamieCrazy_Jamie Forumite
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    Rises in repair costs, the pound's post-Brexit devaluation and a proposal to boost payouts for individuals who suffer life-changing injuries will likely wipe out the pledged £50 annual saving.
    There's also the fact that most insurers likely had no intention to ever pass these savings on. These reforms have come about due to the insurance companies taking advantage of the general public view of 'ambulance chasers' and the 'compensation culture' to push forward reforms that have no objective justification, and which certainly aren't intended to benefit the 'honest motorist'.

    Lest we forget that there were sweeping reforms in 2013 that drastically reduced the costs of personal injury litigation. Those reforms have saved the insurance industry significant amounts of money, and it was promised in the run up to those reforms that the result would be a drop in insurance premiums. But those savings never materialised either, just as these were never going to.
    "MIND IF I USE YOUR PHONE? IF WORD GETS OUT THAT
    I'M MISSING FIVE HUNDRED GIRLS WILL KILL THEMSELVES."
  • One-EyeOne-Eye Forumite
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    The saving of up to £50 a year on average due to civil justice reforms does not (and never did) mean that premiums would fall. It just means that premiums would be less than they would have been without the reforms. If other factors necessitate premiums increasing by £110 on average, then you can expect premiums to increase by £60.

    To explain the "discount rate" in the context of lump sum payments for life changing injuries, the compensation could be based on, for example, £50,000 per year for 20 years. This is not £1,000,000. The £50,000 for year 2 is discounted by 2.5% to become £48780. Year 3 is further discounted by 2.5% to become £47591 and so on. The total payout is £798,942. If Liz Truss cuts the discount rate to 2.0% then the payout would be £833,923. The insurance company needs an extra £34,981 and this will come from premiums.
  • OnanTheBarbarianOnanTheBarbarian Forumite
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    Rules of life

    Insurance companies always win
  • edited 23 February 2017 at 1:46PM
    GingerBob_3GingerBob_3 Forumite
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    edited 23 February 2017 at 1:46PM
    I'm still waiting for insurance to be free. How many times have we heard 'this, that, or the other ....' will reduce the premiums honest policy holders have to pay. You know, the introduction of the MIB database, ANPR, tightening up DVLA registration (SORN etc.), in-car driving surveillance, aka "LittleBox" and the like, and much more. Typically the claim is "this will reduce premiums by £15 ...". Hogwash! Insurance companies sink deeper into the cesspit every day.


    And another thing: can't these reporters write proper English now:


    Rises in repair costs, the pound's post-Brexit devaluation and a proposal to boost payouts for individuals who suffer life-changing injuries will likely wipe out the pledged £50 annual saving.


    The word is PROBABLY! Cut out this Americanisation use of 'likely'.
  • OnanTheBarbarianOnanTheBarbarian Forumite
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    There are no journalists any more. Just kids who copy and paste press releases.
  • GingerBob wrote: »
    I'm still waiting for insurance to be free

    Probably one of the more stupid things you've said, and that's saying something.

    The fundamental principle of insurance is that the premiums of the pool pay for the losses of the few. If there were no premiums, there would be no money to pay claims.
  • GingerBob_3GingerBob_3 Forumite
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    2ndAccount wrote: »
    Probably one of the more stupid things you've said, and that's saying something.

    The fundamental principle of insurance is that the premiums of the pool pay for the losses of the few. If there were no premiums, there would be no money to pay claims.

    Not meant literally, but you apparently didn't spot that. No matter. Here's the gist of it in simpler terms. We are often told a certain element of insurance will be reducing - £15 pa, or sometimes £50 pa are oft-quoted figures - thereby reducing the annual premium. Now here's the funny bit: if we were to add up all those promises of reductions they would typically come to a greater amount than the total premium - alright so far?


    Of course this never happens, and the inescapable conclusion is that the insurance industry are just a pack of lying b*****ds.
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