Car Insurance and Motor Insurance premiums reach record levels
UK Car Insurance premiums reach record levels!
Well we knew our car insurance premium were always on the up but the results of the latest AA British Insurance Premium Index reveal that rates have actually reached an all time high.
In the final quarter of the year the average car insurance premium for an annual comprehensive car insurance policy increased by a whopping 7.2% on the previous quarter. In real terms this meant that the average premium is now priced at around £1,000.00 per year.
On an annual basis the percentage increase was 18.7% for comprehensive insurance. This is the largest increase in this area of business since the records first began back in 1994. Meanwhile the average premium for third party fire and theft increased in the same period by 8.9% to £1,252.00. Annually third party fire and theft rose by 23.8%.
The increases have come as auto insurers have desperately struggled to make up for a lack of reserves which have slowly been exhausted during the economic downturn. Other factors such as steep rises in settlement costs and an increase in the frequency of personal injury claims can also be attributed to the sociological effects of the recession and are also driving the premiums sky high.
The report has been released at a time that most composite insurers are either actively increasing rates or at least discussing it, but the strategies are varied and diverse.
Zurich have taken the impulsive decision to implement a blanket rate increase on its private motor book, a bold move which has certainly caught the market off guard. The Swiss insurer announced it intended to push forward with sharp increases in personal lines motor expected to be in the region of 20% in the broker channel.
Head of personal lines at Zurich's broker division, Mark Coffey said: "We have not aimed our increases at specific brokers or segments of the market - they are right across the piece. The majority of the increase will come in March and the remainder will follow in April.”
He concluded "It is an industry problem - not specific to Zurich - so I will be intrigued to see how other insurers react."
And they were queuing up to respond too…
An Aviva spokesperson commented that "no plans for blanket motor premium increases". And added that “Aviva's motor pricing strategy is still tailored to the individual - we seek to recognise better risks with more competitive pricing,"
A spokesperson for
Car Insurance comparison website Car-Insurance.tv said, “ We’ve been predicting this for a long time now – the underwriting Insurance Companies can’t keep running on a loss and eating claims reserves ad infinitum.”
Meanwhile both Allianz and Axa indicated prior to Zurich’s move that they will be taking some form of corrective action also.
Gareth McChesney, head of pricing and reporting at Allianz Retail, said: "We applied some strength to our ratings in 2009. It seems others in the market are realising the severity of the situation - just six months later than we did."
"In Q4 last year, the market started to correct itself and in 2010 I would expect to see that continue, certainly for the first half of the year. Zurich has put forward a hefty increase in a single month while the market is adopting slightly smaller increases, say 3-3.5%, every month to come up to an acceptable rating level," he added.
Inevitable yes? Necessary pretty much? Helpful as we come out of recession? I let you answer that! From the pen of Insurance Blogger Kris Oldland.
Labels: auto insurance, car insurance, car insurance premiums, motor insurance, UK Car Insurance
The Hidden Costs of Uninsured Drivers in Your Car Insurance Premiums
Car Insurance - Uninsured Drivers Cost You More Than Money!
By
Dave HealeyWe are constantly reminded that the cost of our car insurance premiums are inflated because of insurance fraud and exacerbated by the number of uninsured drivers on the roads! It is certainly true that in the United Kingdom all car insurance companies are required by law to pay into the Motor Insurance Fund (MIF).
This pool of money was designed to protect and recompense the innocent British public, from damage or injury caused by an increasingly large number of uninsured drivers. and accidents involving untraceable hit and run drivers.
The Motor Insurance fund was set up over sixty years ago, immediately following WW2 when the licensing laws and car insurance regulations were still being formulated and yet many of our modern laws were yet to be put onto the UK statute books.
The war years had seen the number of cars and vehicles in the UK rise exponentially, particularly towards the end of the war after the USA joined in, and for the first time British women were systematically taught to drive in their thousands, and indeed even the Queen, Princess Elizabeth as she was at the time, mucked in with driving vehicles of all shapes and sizes and women drove the domestic war effort.
At the end of the war Britain's roads were beginning to become cluttered and returning troops and foreign bases exacerbated the number of unlicensed cars and drivers on UK roads without car insurance to record levels.
As the number of accidents involving uninsured drivers rose steadily, public outcry forced the government to act and in 1946 a Government 'Quango' called the Motor Insurers Bureau (MIB) was established to oversee the whole operation of public compensation for damage, where no car insurance covered the costs.
The MID is to this day funded by a proportion of every policy sold, and to date has paid out over £2 billion in total. The MID have calculated that the cost to each of us when we purchase car insurance is an additional £15 to £30 per policy to cover uninsured drivers, which amounts to more than £200 million every year.
Furthermore, recent statistics from the Bureau indicate the problem of driving without car insurance has not declined over the intervening years since its foundation, and show that the UK continues to have a very poor record, with one in every twenty cars on the road being driven without proper car insurance cover.
Breaking down the statistics further, reveals that the amount of damage caused by drivers without car insurance each year far exceeds the amount paid out in claims every year through the risk fund.
It is often difficult to receive full compensation even if you have identified the uninsured driver, who may well have been prosecuted by the police, and you make a claim through the MIB.
A satisfied claim, that is those claims that are paid out, usually only occur when a particular claim has run the full course of the law and a judgement handed down.
In a case of a hit and run driver without car insurance who is unidentified, the MIB does not pay all legal costs, which can quickly run into thousands, but merely makes a contribution with a deduction to cover the balance of legal costs and expenses.
Thus the hidden costs and misery caused by the actions of those who choose to drive without car insurance is far greater than the official statistics of two hundred million pounds every year.
It is with these figures in mind that the MIB became the centralised point of a new database, the Motor Insurance Database, created at the turn of the century. The database is updated daily with details of every person and their car, who buys a car insurance policy. This information is now immediately available to all police forces throughout the Country, who through automatic number plate recognition systems, can instantly send a car registration number to the MID.
This allows the system to immediately indicate to a police office in the field, cars that are being driven and the driver has valid car insurance in force.
Original Article Source:
http://EzineArticles.com/?Car-InsuranceLabels: car insurance, claims, insurance fraud, motor insurance, uninsured losses
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