Don't Renew Your Car Insurance Until You've Read This!
If like me you've recently had you car insurance renewal documents land on your doormat, you might be in for a very unpleasant financial surprise!
How Much!! You've got to be joking!!
Nothing had changed as far as I was concerned, the car is the same, the road I live in is the same, I still do the same job - the risk hasn't changed at all.
The only difference is that I'm one year older and I thought cover was supposed to get cheaper the older you got!
So what can you do to avoid the rate hikes?
I asked my friend and underwriting expert
Dave Healey for some advice. Here's what he said....
Compare Car Insurance Quotes Online Before You Renew Your Policy
The cost of car insurance premiums are expected to rise dramatically in 2010 with some major insurance news sites predicting up to 20% in premium hikes as the industry adjusts to large losses and claims in recent years
However the competition remains fierce and those who bother to take the time shopping around and comparing prices from different companies will benefit while those who cannot be bothered will pay the price at renewal.
You have probably heard the phrase 'brand new customers only' applied to the television adverts that constantly bombard us with deals and offers for cheaper cover.
Nearly all the major car insurance providers in the United Kingdom are offering incentives to get you to move from your current insurer and take out a policy with them. You will need to check out these offers carefully and be prepared to take the time and effort to understand the 'catches' if you want to successfully reduce your premium each year.
There is no logical reason why your premiums should rise at renewal unless you have had claims, but if you stay with the same insurance company year on year out of inertia, you can virtually guarantee that you will be paying more to cover the costs of the incentives offered to the 'new business or the claims of other people who are insured with the same company.
In the UK car insurance companies seem only concerned with how much volume of new customers they can attract and once they have your premiums you are no longer of interest to them. So if you want to save money on your car insurance it is necessary to change insurer every year!
About a month before your renewal date you should receive from your existing company an invite to renew, which in most cases will be automatic unless you cancel the policy. This is the time to start looking elsewhere for cheaper quotes for the same level of cover. Most quotes are legally valid for thirty days from the date they were given, which will allow you plenty of time to compare the car insurance market before cancelling your policy and obtaining cover elsewhere. The invite to renew document will also contain proof of your no claims driving history and the number of years discount you are entitled to. Keep this document safe as you will be required to produce it when moving to another insurance company as proof of no claims.
Compare and Move!
The best place to start looking for cheaper car insurance is on the Internet Car Insurance comparison sites of which there are many. Choose at least three different price comparison websites to get quotes from; they usually only take a few minutes to complete all your details to get a range of quotes.
Be aware that the number of comparisons they make and the premiums quoted often vary dramatically from one car insurance comparison website to another.
Often the comparison sites may have negotiated different rates with the insurance companies for certain types of customer or car as all car insurance companies have target markets.
To find one which may be more suitable for your needs it is advisable to search online for compare car insurance for your particular make of vehicle. If you have a poor driving history, drive an unusual or classic car or need specialist cover there are now many smaller specialist comparison sites that cater for all these needs.
Once you have found an alternative cheaper provider, make a note of the quote and return to the website just prior to when your existing cover runs out. Be sure to clear down the cookies on your computer's browser, otherwise the company will know you have been quoted before and only offer you the same deal. That way you ensure that you will get any of the latest incentives and discounts when you purchase the cover.
Car insurance can be bought to start from your renewal date and you should return your certificate of insurance to the old insurer once you have found alternative cover. Telephone your existing Insurance company and tell them you are cancelling the cover and will not be renewing. Without doubt they will ask for your reasons. Tell them that they are too expensive and that you have found cheaper cover elsewhere. If you have been a good customer and not claimed, you may be surprised that many will offer to beat or at least match the premium you have been offered elsewhere, which would save you the trouble of moving and cut your motoring costs!
Labels: car insurance, car insurance rates, compare car insurance, compare car insurance quotes, compare quotes, comparing car insurance, price comparison websites
UK Car Insurance Rates Must Harden As Loss Making Companies Claims Reserves Run Dry!
Incredibly
Car Insurance companies in the UK are struggling to make a profit and 2010 is likely to see a large reduction in the supply of car insurance, with many famous brands and suppliers predicted to disappear from the high street and our television screens as the market adjusts to cater for the massive losses, according to analysts from car insurance comparison website
Car-Insurance.tv.
Recently released figures show that the UK Motor Insurance market has been consistently losing money since 2004 when the total UK profit from underwriting car insurance policies was £77 million.
In 2007 the UK car insurance market made a £1.1 billion underwriting loss, last year the loss was £1.3 billion and the figures for 2009 are expected to be worse........
Very few car insurance providers have escaped the losses and are profitable, whilst many have released claims reserves held from previous profitable years to disguise the 'actual ' loss.
So what is causing such massive losses in a large compulsory market that not so long ago was the most aggressive in the world?
On the face of it the answer appears to be simple ...... The Cost of Claims!
Claims are the problem not because the Car Insurance Companies have failed to include the rising costs of claims into their pricing structures; but because they have failed to cover the true costs in the retail price!
Car Insurance underwriters seem to have forgotten the basic rules of betting when setting their prices - and that is, that the Bookie never loses.......
To understand where the car insurance underwriting companies have gone wrong you first need to examine how they arrive at the price of a car insurance policy premium.
The cost of your car insurance premium is basically made up of three components:
1. The costs of production - Staff, Systems, Distribution etc
2. The costs of losses - known claims ratios ( the proportion of a policy premium pool that gets eaten up in claims)
3. Profit
The cost of all these components can be calculated by clever people called actuaries who work for the insurance companies and the rates set accordingly.
So what's gone wrong?
Well naturally it is obvious to first look at claims as the cause of the losses - but the truth is far from this end of the life of a car insurance policy......
The frequency of claims has either fallen or remained fairly constant over the period of losses and the actual cost of claims has only risen by 1 percent.
Despite all the noise made about gangs of car insurance claims fraudsters roaming the streets of the UK, the fact of the matter is that most of this is propoganda aimed at deterring fraud which naturally rises during a recession/depression. The number of fraud cases are really insignificant in the true scale of the market to affect pricing.
Admittedly there has been a significant increase in the number of personal injury related claims, egged on by claims farming companies, which would affect long term pricing, however the losses experienced by Car Insurance companies are nothing to do with claims and claims pricing.
These type of claims fluctuations have always been dealt with successfully in the past by car insurance companies by adjusting reserve ratios or negotiating better re-insurance ( laying the risk off), or more importantly by adjusting price ........
But this time something is different....
Car Insurance Companies can no longer set the price! Not if they want to win the business anyway!
And they certainly cannot sell policies at the premium levels that the Actuaries suggest!
Why? Seemple .......The Internet!
And more importantly Car Insurance Price Comparison websites or aggregators as they are known in the industry, which account for around 90 percent of the Car Insurance sold online. Since around 2004 it has been possible to easily
compare car insurance quotes online from numerous suppliers, and invariably the cheapest premium wins the business.
Car Insurance companies not longer set their own prices! And this is the problem!
In a race to achieve enough volume to make a book of car insurance business profitable the car insurance companies have been selling their
car insurance polices too cheap and covering their losses with their claims reserves........time is running out!
Labels: Actuaries, car insurance, car insurance fraud, Car Insurance Pricing, car insurance rates, cheap car insurance, cheap motor insurance, claims, compare car insurance, premiums, quotes, UK Car Insurance
UK TV Ad Revenue Underwritten by Car Insurance Price Comparison War!
When Insurance Blogger was a nipper.....
Back in the 1960's if you were lucky you had a black and white televison - the box!
with an aerial that looked like a sea mine or something out of Doctor Who sitting on top of it.
There were 2 UK TV Channels:
The BBC - Mother of the Nation and voice of the world......
& ITV - which was a loose consortium of regional independent television companies that broadcast on their own frequency AND network distribution relay.
This meant that every time you changed channel, which was a process of turning a huge dial until you got a fuzzy ghost image - you had to turn the aerial as well to switch to a different signal supplier.
This caused much distress in every UK Household with people arguing over aerial placement whilst trying to watch fuzzy images of man supposedly walking on the Moon.
The Independent Television Companies were funded by advertising revenue for commercials placed in programme 'intermissions' known in the UK as 'Commercial Breaks'. This allowed companies like Granada to fund their own programmes and make 'soaps' like Coronation Street.
Product placement was banned on The BBC and was also severely limited as to the acceptable use of on screen products, within ITV programme drama of the day.
This ban has very recently been lifted and you might soon even see the BBC's Phil Mitchell on Eastenders popping down to his local Post Office TM for some Travel Insurance or visiting a car insurance comparison website for his Jaguar insurance, coming to our screens as desperate TV production companies try to raise additional funding in hard times.
Even the BBC will not remain immune in the face of falling TV viewing figures and the rise of integrated digital services.
Today ITV is still reliant upon revenue sourced from intermission commercials, however with global distribution opportunities for selling programmes abroad they are now able to find sponsors for most popular shows.
According to a recent survey by business intelligence group DataWatch Monitor UK, Insurance adverts account for 52% of the total advertising revenue spend on UK TV commercials and specifically
car insurance which accounts for 63% of that.
So Who is spending all this money, millions of pounds that is underwriting some great UK independent TV productions?
Well unless you live under a rock or don't own a screen (Boxes are consigned to pre-history along with the Dodo and the Betamax by the way!), you can't have failed to notice that there is a
car insurance price comparison site war going on out there at the moment with the BIG 4 all trying to outdo each other on spend and it's getting dirty..........
So who are the big 4?
Well in no particular order , though Google has one....
Money Supermarket.com
Confused.com
Compare The Market.com
Go Compare.com
So who is winning this war?
Well it's hard to give a definitive answer because campaigns are in a constant state of flux and one month it might be the furry
meerkat toy rodent or the next month, the fat opera singer at No.1 in the Sales Charts. It is difficult to COMPARE!
The TV ads always tell the prospect car insurance purchasers to visit their website, so a fairly accurate measure of website usage over time by website name search, can be extracted from Google and here are the results....
WACKY RACES
As you can see, that annoying pompous man from the Dragons Den is leading the way by far at the moment with the furry rodent bringing up the rear. This is likely to change at Christmas when Compare The Market bring out the talkng meerkat. Looks like the fat annoying tenor over there Ad is working!!! For Now!
To see how your website compares to the big boys do your own visitor comparison with your competitiors over at
Google Trends for Insurance Price Comparison giantsLabels: advertising, car insurance, compare car insurance, Compare The Market, Confused, Go Compare, insurance comparisons, insurance marketing, MoneySupermarket, price comparison
