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Car Insurance Costs Rise By New Record

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http://www.bbc.co.uk/news/business-11516195

The AA has recorded the biggest jump in the cost of car insurance since it started tracking the market, with young people bearing the brunt of the rise.

Figures due to be published this week show premiums for 17 to 22-year-olds have risen by 47% in a year.

Young male drivers are paying the most, with the average of the three cheapest quotes they get being £2,457.

That is nearly double the premiums offered to young women, the motoring group said.

The insurance costs are being blamed on another surge in claims for injuries sustained in accidents.

"If you have an accident which leaves someone disabled, the claim can be up to £15m," said Simon Douglas, director of insurance at the AA.

"Young men are twice as likely to be involved in these incidents than young women."

Burden The impact of the rises is to make driving unaffordable for some young drivers and a huge burden for those who can gather the cash.

Ryan Bird, a 20-year-old heating engineer from Middlesex, told the BBC that he was paying £2,100 a year to insure an old Ford Fiesta worth £700.

"It is daylight robbery," he said.

"People I know cannot afford it. They can run a car but it is the price of insurance which knocks them back."

A search on a comparison website can be a major letdown for 17-year-olds who have just passed their driving test. It is common for quotes as high as £12,000 to show up as the least expensive option.

"It was such a shock," said Ryan, who has been driving for three years.

"I went on both the price comparison sites that advertise on TV and one of them quoted me over £6,000."

Drivers have little chance of finding an affordable quote, unless they put a huge effort into shopping around. Some insurers have pulled out of the young end of the market entirely, because of losses.

The AA blames lawyers for exacerbating the problem by taking a 40% cut of personal injury claims.

"The number of claims is increasing and the number of passengers involved is increasing," said Mr Douglas, of the AA.

"Some of that is being driven by no-win, no-fee lawyers. Their numbers have doubled in the last two years."

The AA started compiling an index on car insurance rates 16 years ago. These are the sharpest rises it has seen since then, with premiums accelerating to new highs.

More scamming and thievery. This time by the lawyers (again).

It seems our 'professional' cartels have no other business model than stealing from young people.

When it costs 3 times the value of an asset every year just to insure it there's clearly a total market failure.

(warning: the following responses may involve the word 'chav')

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Simply the consequence of computer modelling down to the nth degree in terms of risk.

We should be more worried about the irresponsible folks who don't buy insurance than the ones who do. Isn't an average of £80 added to each policy for the uninsured driver claims? Get the police to deal with that before worrying about speeding and mobile phone use.

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Simply the consequence of computer modelling down to the nth degree in terms of risk.

We should be more worried about the irresponsible folks who don't buy insurance than the ones who do. Isn't an average of £80 added to each policy for the uninsured driver claims? Get the police to deal with that before worrying about speeding and mobile phone use.

WIth prices like that its no wonder that there are people without insurance.

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Both injuries and fatalities have been going down for years, in spite of increasing traffic volumes so it must be something else.

http://www.theaa.com/public_affairs/news/latest-road-accident-statistics-september-2010.html

I suspect that the insurance companies are recouping losses in other parts of their business that is not doing so well.

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They need new measures to target all uninsured drivers and then their revenues would increase allowing them to not just focus on what seems like the minority of people who are insured and charge them a fortune.

What is it with this country and the way it seems to just pick the easiest target and hammer them for all their worth.

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Simply the consequence of computer modelling down to the nth degree in terms of risk.

We should be more worried about the irresponsible folks who don't buy insurance than the ones who do. Isn't an average of £80 added to each policy for the uninsured driver claims? Get the police to deal with that before worrying about speeding and mobile phone use.

Because its a legal requirement to hold third party insurance the government should provide basic affordable insurance via the post office or DVLA. Penalties should be severe for motorists without the minimum legal requirement i.e ten year ban. The insurance companies should only meet the needs of any one who requires additional cover over and above third party.

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Because its a legal requirement to hold third party insurance the government should provide basic affordable insurance via the post office or DVLA. Penalties should be severe for motorists without the minimum legal requirement i.e ten year ban. The insurance companies should only meet the needs of any one who requires additional cover over and above third party.

Several countries include basic 3rd party cover as part of vehicle licensing. It should come with the tax disc.

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Because its a legal requirement to hold third party insurance the government should provide basic affordable insurance via the post office or DVLA. Penalties should be severe for motorists without the minimum legal requirement i.e ten year ban. The insurance companies should only meet the needs of any one who requires additional cover over and above third party.

Not so daft, are you? The basic 3rd party pool should be a state backed not-for-profit. Otherwise corruption and cartel behaviour insidiously creeps in over time.

FWIW, the insurance companies are gouging their customers here in Singers too.

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Simply the consequence of computer modelling down to the nth degree in terms of risk.

We should be more worried about the irresponsible folks who don't buy insurance than the ones who do. Isn't an average of £80 added to each policy for the uninsured driver claims? Get the police to deal with that before worrying about speeding and mobile phone use.

Yes

Given that young men are facing the brunt of the job cuts, and many jobs require 'your own transport', these computer risk models are analysing many in this demographic out of a job.

I also find that gender risk characteristics are not applied universally. For example Men tend to rake the big debt up (five figures plus) but these tend to be lower in number Were as women are more likely to run up Credit/store card debt and risk defaulting on them.

Also there's this massive rate increase of 45% more women declaring themselves bankrupt.

Do credit card and loan companies factor this in when building their scorecard models? Do men face higher personal loan rates and women higher creidt/store card rates? Of course not. So why is gender allowed to be used when calculating an insurance quote?

flakey link

Of course it would help if 75% of boy drivers didn't drive like absolute to55ers! Don't know why the other 25% have to fork out for them mind. Upping the price upon/after claiming would be fairer.

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They need new measures to target all uninsured drivers and then their revenues would increase allowing them to not just focus on what seems like the minority of people who are insured and charge them a fortune.

What is it with this country and the way it seems to just pick the easiest target and hammer them for all their worth.

Part of it is apparently the huge rise in injury claims, many of them bogus. I've also noticed a huge amount of cars that get written off (cat D) with very minor damage. It's the labour costs and quickly getting rid of the hire car costs to the claimants that have given rise to this.

If I was starting again, I'd run an old 'classic' car where you can build up NCB at a very cheap rate. Can't drive a Humber, Morris or old mini though innit, can't get me bangin' sounds in it.

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Because its a legal requirement to hold third party insurance the government should provide basic affordable insurance via the post office or DVLA. Penalties should be severe for motorists without the minimum legal requirement i.e ten year ban. The insurance companies should only meet the needs of any one who requires additional cover over and above third party.

Yep - this is how is works in Australia I believe. Mandatory third party insurance provided as part of the annual road tax fee then drivers can purchase additional cover from the provider of their choice.

Makes a lot of sense but I can't see the insurance company lobbyists allowing it to happen. Too much cash to be squeezed out of a captive audience.

Still - just as well we're having all this deflation or costs could really be getting silly, eh? <_<

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Yep - this is how is works in Australia I believe. Mandatory third party insurance provided as part of the annual road tax fee then drivers can purchase additional cover from the provider of their choice.

Makes a lot of sense but I can't see the insurance company lobbyists allowing it to happen. Too much cash to be squeezed out of a captive audience.

Sounds like the sort of thing that should get many HPC regulars up in arms - it's nationalising part of the insurance industry after all. Thought the free market was supposed to solve everything...

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Sounds like the sort of thing that should get many HPC regulars up in arms - it's nationalising part of the insurance industry after all. Thought the free market was supposed to solve everything...

:lol:

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Yep - this is how is works in Australia I believe. Mandatory third party insurance provided as part of the annual road tax fee then drivers can purchase additional cover from the provider of their choice.

Makes a lot of sense but I can't see the insurance company lobbyists allowing it to happen. Too much cash to be squeezed out of a captive audience.

Still - just as well we're having all this deflation or costs could really be getting silly, eh? <_<

did mine the other day.

down around 8%. :)

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Mine is the lowest it's ever been.

It seems like the industry is correctly pricing the risk of insuring stupid little boys. There will have to be some scheme of compulsion soon or else the underclass of uninsured will just increase.

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Sounds like the sort of thing that should get many HPC regulars up in arms - it's nationalising part of the insurance industry after all. Thought the free market was supposed to solve everything...

It would only be the same as paying tax to the inland revenue. People would be up in arms if income tax was collected at higher rates by private profit making companies .

Free market is fine when people have a choice

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None of the costs that come with any insurance claim seem to be legit and everybody knows it.

A car hit in the rear end with a damaged bumper could be repaired quite easily and relatively cheaply by any local garage. But take it to an 'insurance approved' garage and as soon as the word 'insurance' is mentioned the price is at least doubled. A brand new bumper is needed, a respray, probably a boot because it has a tiny dent in it and the list goes on.

Cars are written off because they are deemed uneconomical to repair, no sh1t when all brand new parts are being used direct from the dealers just for the sake of it. What is the point in using brand new parts and respraying the likes of a 'p' reg?

Then there are the injury claims. Solicitors fees rocket as soon as the 'I' word is mentioned. Not to mention the parasites complete lack of integrity.

Everybody seems to want to milk this faceless insurance entity without considering the implications. Drivers that get a small bump go to the insurance and because it wasn't their fault want the front/back end of their car to look like it just came from the showroom even though the rest of the sh1t heap is held together with chewing gum and electrical tape. But is doesn't matter, its on the insurance innit?

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Yes - basic insurance to be taken out of the Car License fee. Or just the normal state coffers.

No thanks.

When I run and insure a car, I want to pay for my own costs and insurance and not subsidise the careless or inexperienced.

And as for "state coffers". Ha. There have been big chunks of my life when I've run no car at all and I'm buggered if I want my income tax to subsidise drivers' insurance costs.

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Sounds like the sort of thing that should get many HPC regulars up in arms - it's nationalising part of the insurance industry after all. Thought the free market was supposed to solve everything...

Why would the government ever agree to this?

Having private insurance was made a legal requirement for exactly the same reason that the government do not care about rocketing and unfair pricing.

I will give you a clue... premium 7 insurance % tax

Edited by richyc

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Mine is the lowest it's ever been.

It seems like the industry is correctly pricing the risk of insuring stupid little boys.

This logic isn't universally applied though, is it?

And since when did 'having no insurance' ever bother stupid little boys?

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Part of it is apparently the huge rise in injury claims, many of them bogus. I've also noticed a huge amount of cars that get written off (cat D) with very minor damage. It's the labour costs and quickly getting rid of the hire car costs to the claimants that have given rise to this.

If I was starting again, I'd run an old 'classic' car where you can build up NCB at a very cheap rate. Can't drive a Humber, Morris or old mini though innit, can't get me bangin' sounds in it.

unfortunatly classic car insurance wont cover someone under 23 and in most cases 25. they are also very restrictive if you dont have off street parking and its your only car. that said when i bought mine (mk1 escort) it cost 750quid fully comp and i was 23. that went down to 250 2 years ago (im 29 now). there are big downsides though, i didnt build up a no claims bonus, was restricted to 7000 miles a year and was not covered for commuting. it meant when i got a 'normal' car i was still stung on insurance.

classic cars are cheaper even if you have to go on a regular policy but your looking at over 1500quid to insure something like a 900cc mini. the only solution kids have these days is to be a named driver on a parents policy and even that is incredibly pricey compared to how it used to be when i was learning.

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My car was involved in a crash, last winter which necessitated a 6 week stay in a garage (stretching out the duration to maximise the profits if I'm not mistaken) and costing c. £3000.

The insurance company offered me a "free" hire car while I was waiting for mine to be repaired, the lady on the phone seemed genuinely surprised that I should decline this "free" offer. I rented a car when I needed one from the local rent-a-wreck place for about £10 a day.

Long story short, nearly 10 months later and the case still hasn't been solved with the lawyers.

My belief is that the whole insurance industry is a huge honey-pot for the various VIs: recovery companies, insurance, lawyers, repair workshops, claims managers, hire-car firms to name but a few but the reason that insurance premiums are getting higher may be due to an increase in fraud. Afterall, if you are sp_nking £2100 up the wall every year to drive a million-year-old Fiesta with nothing to show for it; why not indulge in a spot of insurance fraud?

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http://www.bbc.co.uk/news/business-11516195

More scamming and thievery. This time by the lawyers (again).

It seems our 'professional' cartels have no other business model than stealing from young people.

When it costs 3 times the value of an asset every year just to insure it there's clearly a total market failure.

(warning: the following responses may involve the word 'chav')

The true craziness is not that the insurance costs three times that of the asset it is that in many cases if third party cover is taken then the asset only has limited cover.

As is always the case with motor insurance it's the damage a car can do to others which costs the bulk of the money.

On an aside every time I renew my insurance ( recently they tried to raise it from 285 to 598) I am struck by

1/ How little a no claims bonus seems to really count ( or at least the further you go the less impact it has)

2/ How it seems the market revolves around other sales to make any money.

As a result it appears the only way to get a good deal is to switch policy each and every year..... I had to do the same yet again this year to get the policy back down below £300.

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Afterall, if you are sp_nking £2100 up the wall every year to drive a million-year-old Fiesta with nothing to show for it; why not indulge in a spot of insurance fraud?

...because it will make your premiums rise next year and give you more to b1tch about.

Sadly, this is the way that everyone thinks and one of the main reasons that we get screwed by insurance companies every year.

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  • 259 Brexit, House prices and Summer 2020

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      • down 5% +
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