Car insurance extortion

Dannydee333

My car insurance needs renewed soon. Since I started driving 7 years ago, I have consistently been able to find a reduced price every year by £100 on average. Last year was it only about £50 less than the year before, but a win's a win.

I've just done a search on a comparison site and the best apparent quote comes up at almost £350 MORE than last year. I pay annually to save money, and last year it was £457, this year the best price, as of today, is £800.

This is very disappointing as I had been comfortably getting a lower price each year, and now it's gone way back up to the price I was getting 4 or 5 years ago. What's happened in the last year that insurance companies think it's appropriate to rip people off?

I'm currently trying to get a mortgage at the minute, too, and all I can see right now is the ugliness of greed at every turn.

jlfrs01

https://www.theguardian.com/money/2023/jul/22/uk-drivers-car-insurance-costs-price-petrol-diesel

TheMilkmansDad

a multitude of factors have contributed to the increase. have a read of some of the other threads on here to get a better understanding.

MattMattMattUK

Dannydee333 said:

My car insurance needs renewed soon. Since I started driving 7 years ago, I have consistently been able to find a reduced price every year by £100 on average. Last year was it only about £50 less than the year before, but a win's a win.

I've just done a search on a comparison site and the best apparent quote comes up at almost £350 MORE than last year. I pay annually to save money, and last year it was £457, this year the best price, as of today, is £800.

This is very disappointing as I had been comfortably getting a lower price each year, and now it's gone way back up to the price I was getting 4 or 5 years ago. What's happened in the last year that insurance companies think it's appropriate to rip people off?

I'm currently trying to get a mortgage at the minute, too, and all I can see right now is the ugliness of greed at every turn.

Extortion it is not. 

Prices have risen for many reasons, they have also risen for mortgage rates (largely because of the BoE interest rate rises), greed is not the issue, serial economic mismanagement by the government is part of it, as are global economic and political issues. 

Dannydee333

How does an "insurance policy" that sits in a file on a hard drive doing absolutely nothing suddenly cost so much more than before?

Definitely looks like greed and extortion from where I'm sitting.

Wonka_2

Dannydee333 said:

How does an "insurance policy" that sits in a file on a hard drive doing absolutely nothing suddenly cost so much more than before?

Definitely looks like greed and extortion from where I'm sitting.

It can only be considered that (if you choose to think of it in that way) until you need to use it

As soon as you use is and the value of premiums paid becomes 10x that as a payout and your views may differ 

I'm 35yrs into motor insurance and never had a claim - but I still consider it a cost of having a car/bike

Dannydee333

Wonka_2 said:

It can only be considered that (if you choose to think of it in that way) until you need to use it

As soon as you use is and the value of premiums paid becomes 10x that as a payout and your views may differ 

Well that hasn't happened, so why punish me for it?

400ixl

Dannydee333 said:

How does an "insurance policy" that sits in a file on a hard drive doing absolutely nothing suddenly cost so much more than before?

Definitely looks like greed and extortion from where I'm sitting.

It doesn't sit on a hard drive and do nothing. If it were the case that the premiums you pay only cover your risk then your limit for paying out would be extremely low.

The money is taken and invested for the period they can before it has to be paid out for some other purpose such as a claim by a policy holder.

We are in a period where the supply chain costs have gone up, inflation is high, and the investment market (S&S, property etc) are all low. This means that the costs of claims have increased and they don't get as high (if any) return on the investment in the time they can invest.

In these circumstances in a business where profit margins for the best performers is still in single digits they have to pass on the costs to the consumer.

General Insurance is a competitive market and actually does see premiums drop when the market allows. It is also highly regulated.

There isn't any extortion, cartels, greed or profiteering going on in General Insurance.

The reason you have been able to get discounts each year is that at the start you were improving your driving history, allowing them to see you as a lower risk and therefore reward you for that. Then we had the pandemic where accidents were lower due less driving. Both of those scenario's have now gone away and replaced by high costs of claims and low returns on investments. Hence the price rise.

Wonka_2

Dannydee333 said:

Wonka_2 said:

It can only be considered that (if you choose to think of it in that way) until you need to use it

As soon as you use is and the value of premiums paid becomes 10x that as a payout and your views may differ 

Well that hasn't happened, so why punish me for it?

Not sure you understand the world of insurance - nor the definition of punishment

Insurable costs are rising (car parts/availability and therefore hire/replacement cars) and overall car values have risen. Depending on your car/location/risk factors you'll be given a price which, as per the median link posted, will have increased vs last year by a % that's probably higher than many other categories (food/consumer goods) but less than others (fuel/freight)

On a positive note if your increase is only 30% you're not being 'punished' to the level of someone with a Range Rover Sport in London

Dannydee333

400ixl said:

It doesn't sit on a hard drive and do nothing. If it were the case that the premiums you pay only cover your risk then your limit for paying out would be extremely low.

The money is taken and invested for the period they can before it has to be paid out for some other purpose such as a claim by a policy holder.

We are in a period where the supply chain costs have gone up, inflation is high, and the investment market (S&S, property etc) are all low. This means that the costs of claims have increased and they don't get as high (if any) return on the investment in the time they can invest.

In these circumstances in a business where profit margins for the best performers is still in single digits they have to pass on the costs to the consumer.

General Insurance is a competitive market and actually does see premiums drop when the market allows. It is also highly regulated.

There isn't any extortion, cartels, greed or profiteering going on in General Insurance.

The reason you have been able to get discounts each year is that at the start you were improving your driving history, allowing them to see you as a lower risk and therefore reward you for that. Then we had the pandemic where accidents were lower due less driving. Both of those scenario's have now gone away and replaced by high costs of claims and low returns on investments. Hence the price rise.

Appreciate you explaining why these companies increase insurances ridiculously.

No matter what way you look at it, nor what excuses or justifications are claimed, there is no-one who's going to be happy about paying double and in some cases x5 more than last time.

Dannydee333

Wonka_2 said:

Not sure you understand the world of insurance - nor the definition of punishment

Insurable costs are rising (car parts/availability and therefore hire/replacement cars) and overall car values have risen. Depending on your car/location/risk factors you'll be given a price which, as per the median link posted, will have increased vs last year by a % that's probably higher than many other categories (food/consumer goods) but less than others (fuel/freight)

On a positive note if your increase is only 30% you're not being 'punished' to the level of someone with a Range Rover Sport in London

I don't care about the reasoning behind it, being on the receiving end of ridiculous increases is always going to be unwelcome to people who aren't millionaires.

£460 last year. £800 this year. That's quite a bit more than 30%.