New rules set by the Financial Conduct Authority, which came into effect last week, stipulate that car insurance firms must be more transparent. Firms are now obliged to reveal how much a renewed premium costs compared to the previous year’s renewal.
In theory, by increasing pricing transparency, any price hikes should require valid justifications. However, some of the team here at PetrolPrices.com have noticed from their own experiences this week that insurers are sending emails to customers without the old price one to two weeks before the official renewal letter, in the hope this will convert customers before they see the price difference in the letter.
Rising costs
Premiums have risen by 8% since last year, according to the Association of British Insurers, so this new tactic is adding insult to injury. The average premium is now £462 – the highest it’s been since 2012. Meanwhile, the average comprehensive policy has risen by 16%, to £781.
Research compiled by Consumer Intelligence predicts that average insurance premiums could hit £1,000 in a year’s time. Insurers cite an increase in repair bills, compensation calculation changes, insurance premium tax and fake whiplash claims as causes of the price hikes.
Interestingly, the number of claims has decreased by 12% year on year, campaigning law firm Thompsons Solicitors said last week.
This raises several important questions about what is actually going on. Are we seeing profiteering on the part of insurers or a genuine shift towards driving becoming a much more expensive thing to do? Are car insurance firms being truthful about premium rises?
Thompsons Solicitors’ head of policy, Tom Jones, said:
“It’s clear that the number of claims – whether they’re up or down – has no bearing on the cost of car insurance, and that the industry is set on increasing premiums no matter what.”
Taxing insurers, not consumers
The government has increased taxes, with Insurance Premium Tax due to rise from 10% to 12% in June. However, the Treasury has insisted that the “Insurance Premium Tax is a tax on insurers, not consumers” and that it is the insurance firms’ choice whether they pass the costs onto customers.
Given the updates to taxes on fuel, congestion and pollution and fines for speeding, littering and mobile phone use that have been reported recently, we’re beginning to wonder whether the government’s plan is to make it too expensive for people to drive on Britain’s roads. That’s certainly one way to go about hitting their pollution targets!
What are your thoughts on tackling the issue? Are we being misled by insurers and the government? Is this part of a grand plan to get motorists off the road to meet pollution targets? Tell us what you think below.
They are just greedy buggers just like any other business, just look at the price of food/gas/electricity/clothes/TV licences/etc, and look at the crap you see on the telly/ how it has ALL gone up just over a period of a year,
They are all greedy and we keep paying out without standing up for ourselves and saying NO ENOUGH IS ENOUGH, no more, do like the Froggies do and start blockading the ports and motorways, all of us not just a few and think there will be enough to do the job without me attending, get off your asses and help stop these stupid price rises every five minutes.
I’ve just had my renewal quote and they wanted a massive 277% increase, going up from £546.24 per year to £2000, when asked why such a massive increase, apparently it was my new address which has a secured locked compound.
Told them to cancel policy, found another insurance company that quoted £600.
Just greedy
As my insurance costs are supposed to reflect the risk to the insurance company based on my details why can’t they say that if my details are unchanged then the risks must be the same so any increase in price must be justified mathematically on the quote including the profits of the insurance company. That would make interesting reading.
Premiums increase because of claims whiplash? What is the use of headrest? I thought the original reason for fitting them was to prevent whiplash so why do the insurance companies even entertain any of these claims.
If you make a claim on your insurance, you’ll keep paying for it for the rest of your days. I had an accident (crash for cash) about 6 years ago. The police weren’t interested, and neither was the insurance company… But I know I am still paying for the incident.
I had an insurance policy for which I paid extra to protect my no claims policy (as one does)… Somewhere in the past
the insurance company had sent me a letter with a few “changes to the policy” reams of paper and in the very small print, which I missed, they had scrapped the no claims bonus protection, instead they had reduced it to taking it back to 3 years of no claim bonus.
Needless to say my premiums have gone up in an astronomical amount and I pay more per month than I did per year. Insurance companies seem to snatch numbers out of the air as your insurance premium.
Anyway this year, I am not renewing my insurance for this particular car… Because it isn’t worth it any more.
My car renewal from LV has increased by 37%. No changes to details and no claims. When confronted they stated that they had reassessed the criteria for providing cover. All these percentages in the media are meaningless. Don’t take these increases and shop around. I have and saved over £100.
Oh what a bell this rings with me. I’ve just had a renewal invitation from LV which is 37% higher than last year. I’ve not made any sort of claim, the add-ons like a courtesy car if needed are the same, the excess charge is the same, in other words the policy renewal is identical to that which is already in force.
Phoned to query and was told they couldn’t give a proper explanation – something to do with confidential information!!! Usual excuse.
Anyway, went online with the same company and guess what – a NEW policy with them – all the same details as current policy – was just about the same as I’m currently paying.
Rip off on existing customers or what?
Can’t anyone take these companies to task and make them treat their customers fairly
We got a renewal from the insurance company we have been with for years….we recently changed our car for one 10 years newer…we got quoted an extortionate amount…how can you charge more for a 3 year old car compared to our 13yr old car…we queried this and they said it was because it was NEW….get this because its NEW it cost more to insure…Daft….i guess they just like robbing us………MAYBE IF WE DO WHAT THE FRENCH DO AND STAND UP FOR OURSELVES THEN THEY WOULD’NT GET AWAY WITH IT.
Your article does not mention the total cost of claims, only the number of claims. As cars become more technical the damage caused by even a minor shunt is becoming much more costly to repair. For example the addition of parking sensors in the rear bumper change it from a cheap plastic part on older cars to a costly piece of electronics on newer cars.
Also there is more theft of entire cars. Around us most house burglars are just stealing keys to take the car from the drive. The cars are then shipped abroad or dismantled for spares.
There is plenty of competition among insurers to keep them competitive, as long as customers shop around. The companies will always try to get more from renewals (where people are lazy) than from new customers (whom they attract with low premiums). If they want to play that game customers just have to shop around and become a ‘new customer’ every year (by finding a new supplier).
The real problem is the car manufacturers. Unlike the insurers, they have a monopoly on supplying the spare parts. Just as you can buy a printer for your computer with a set of ink cartridges for less than the cost of replacing the ink, so car manufacturers charge a lot more for spare parts than they charge for a complete car. They know that we have no choice of supplier for spares once we have bought the car. This is why so many cars are being stolen for the parts, which is also driving up claim costs.
“Had the exact same experiance as Robert Jones” Same company the cheapest shown some £400 cheaper than quoted. So went for it. Paid printed off new documents. Printed off the NCD proof from previous policy. Called to say not renewing and then gave them the new policy number and could they pull up the NCD proof internally!!!
They went on to say that they would cancel policy and web site prices were for new drivers. Went up two levels od supervisors. Backed off with theats of court for “breach of contract” no change in circumstances etc.
Its a rip off, Its just like all companies from Energy, telephones and TV providers. Shop around use the same company if needed, just make sure they have accepted your money first
While many of you do complain about the price increase including myself (not happy that my insurance went up by nearly £100 YoY) i must say that this is done by British people. Those who voted leave EU knew more or less that leaving EU meant increase in prices, Telephone, Mobile, Electricity and not least food cost. We will see an increase in cost across everything and this will not stop, the challenge will be what do you do when cost does go up but not your income???
My advice to anyone here who reading this is, always always always change Insurance company and never accept renewal price as it is a rip-off.
I’ve had a clean licence for well over 40 years. Nil claims, nil points, not so much as a parking ticket. By driving carefully. So YES I DO object very strongly indeed to subsidising careless drivers who aren’t as careful. Those who just don’t give a toss about other road users.
My solution has been quite simple for many years. A small, proportionate rise is acceptable. More than 5% and I cancel my policy immediately and never use that company again. It’s just sheer greed by the insurers.
Leave lawful drivers alone. Put premiums up substantially for those who don’t feel the need to bother being careful. Hit THEM in the pocket, not US.
I’ve just bought a new Nissan Qashqai….I went through Direct line website as a new customer…came up with £200, thought that can’t be right, so phoned them up. Explained that I already had a policy with them, and that I wanted to change if over to the new car….they wanted and extra £67 from me….on top of the £257 I paid for my 16 year old golf two month earlier, when I said that their website had quoted £200 they guy went away and came back with £22 extra…then he said he would look at the breakdown cover, and said oh we owe you £15 refund.
Now I have to insure my brothers car for him which is a 2005 Mondeo….was told by one insurer that it’s only worth £700….then to be told that the insurance would be £1,8000, and that was their cheapest!!….How can these b*****ds rip us off like this?
Has anyone tried Hastings? they come up with different prices all the time, and when I try and buy the policy on line, there’s no button to buy the policy…so you ring them, and no-one answers!!! ahhhhhhhhhhhhh
I’m afraid it’s more a question of greed and inefficiency than anything else. Someone damaged my parked car last year, and of course this was a “no fault” claim to me. My insurer then processed the claim through a series of other companies who each did this and that to the process, adding to the overall cost. That started with an assessor who came in with a ridiculous estimate (£2100, I finally had the car repaired to my satisfaction for about £700 – haven’t we all heard the question “is it an insurance job?”), while another provided me with a hire car I didn’t need or want, and even charged me a service fee for putting fuel into it. It seems to me that the insurance world is populated by small outfits hanging on and feeding off the bigger insurers, each adding their own costs as of course they must. It stands to reason that if each insurer kept sensible and proportionate costs in mind and managed the issues more in-house, thus getting rid of the hangers on, we drivers would be better off.
My renewal a few weeks later was a silly amount, a 25% increase or thereabouts. This following a no fault claim? I told them goodbye. Maybe we should all be a bit harder on our insurers? Even Company car drivers, who often dont care what their car costs, will have to care one day when they come to insure their own vehicles.
I have my renewal in 466 against 455 last year. NCB ? What is going on ? I want the select committee to ask the MIB to look at this. I drive careful and need to know why I am paying more each year. I do not want excuses about others and people who are illegally on the road. The police should be paid to remove them, a scrappage scheme going into the Police coffers.
Getting back to having traffic officers again. Why do I bother with insurance, VED etc ? Well I know that slowly we are under the camera’s eye coupled with computers. You would soon get told by a letter in the post or a visit to your door. Insurance is a system overdue a rethink. Careful drivers need less premiums and not paying for the insurance bosses Porche or DBS.
They are just greedy buggers just like any other business, just look at the price of food/gas/electricity/clothes/TV licences/etc, and look at the crap you see on the telly/ how it has ALL gone up just over a period of a year,
They are all greedy and we keep paying out without standing up for ourselves and saying NO ENOUGH IS ENOUGH, no more, do like the Froggies do and start blockading the ports and motorways, all of us not just a few and think there will be enough to do the job without me attending, get off your asses and help stop these stupid price rises every five minutes.
I’ve just had my renewal quote and they wanted a massive 277% increase, going up from £546.24 per year to £2000, when asked why such a massive increase, apparently it was my new address which has a secured locked compound.
Told them to cancel policy, found another insurance company that quoted £600.
Just greedy
As my insurance costs are supposed to reflect the risk to the insurance company based on my details why can’t they say that if my details are unchanged then the risks must be the same so any increase in price must be justified mathematically on the quote including the profits of the insurance company. That would make interesting reading.
Premiums increase because of claims whiplash? What is the use of headrest? I thought the original reason for fitting them was to prevent whiplash so why do the insurance companies even entertain any of these claims.
If you make a claim on your insurance, you’ll keep paying for it for the rest of your days. I had an accident (crash for cash) about 6 years ago. The police weren’t interested, and neither was the insurance company… But I know I am still paying for the incident.
I had an insurance policy for which I paid extra to protect my no claims policy (as one does)… Somewhere in the past
the insurance company had sent me a letter with a few “changes to the policy” reams of paper and in the very small print, which I missed, they had scrapped the no claims bonus protection, instead they had reduced it to taking it back to 3 years of no claim bonus.
Needless to say my premiums have gone up in an astronomical amount and I pay more per month than I did per year. Insurance companies seem to snatch numbers out of the air as your insurance premium.
Anyway this year, I am not renewing my insurance for this particular car… Because it isn’t worth it any more.
My car renewal from LV has increased by 37%. No changes to details and no claims. When confronted they stated that they had reassessed the criteria for providing cover. All these percentages in the media are meaningless. Don’t take these increases and shop around. I have and saved over £100.
Oh what a bell this rings with me. I’ve just had a renewal invitation from LV which is 37% higher than last year. I’ve not made any sort of claim, the add-ons like a courtesy car if needed are the same, the excess charge is the same, in other words the policy renewal is identical to that which is already in force.
Phoned to query and was told they couldn’t give a proper explanation – something to do with confidential information!!! Usual excuse.
Anyway, went online with the same company and guess what – a NEW policy with them – all the same details as current policy – was just about the same as I’m currently paying.
Rip off on existing customers or what?
Can’t anyone take these companies to task and make them treat their customers fairly
We got a renewal from the insurance company we have been with for years….we recently changed our car for one 10 years newer…we got quoted an extortionate amount…how can you charge more for a 3 year old car compared to our 13yr old car…we queried this and they said it was because it was NEW….get this because its NEW it cost more to insure…Daft….i guess they just like robbing us………MAYBE IF WE DO WHAT THE FRENCH DO AND STAND UP FOR OURSELVES THEN THEY WOULD’NT GET AWAY WITH IT.
Your article does not mention the total cost of claims, only the number of claims. As cars become more technical the damage caused by even a minor shunt is becoming much more costly to repair. For example the addition of parking sensors in the rear bumper change it from a cheap plastic part on older cars to a costly piece of electronics on newer cars.
Also there is more theft of entire cars. Around us most house burglars are just stealing keys to take the car from the drive. The cars are then shipped abroad or dismantled for spares.
There is plenty of competition among insurers to keep them competitive, as long as customers shop around. The companies will always try to get more from renewals (where people are lazy) than from new customers (whom they attract with low premiums). If they want to play that game customers just have to shop around and become a ‘new customer’ every year (by finding a new supplier).
The real problem is the car manufacturers. Unlike the insurers, they have a monopoly on supplying the spare parts. Just as you can buy a printer for your computer with a set of ink cartridges for less than the cost of replacing the ink, so car manufacturers charge a lot more for spare parts than they charge for a complete car. They know that we have no choice of supplier for spares once we have bought the car. This is why so many cars are being stolen for the parts, which is also driving up claim costs.
“Had the exact same experiance as Robert Jones” Same company the cheapest shown some £400 cheaper than quoted. So went for it. Paid printed off new documents. Printed off the NCD proof from previous policy. Called to say not renewing and then gave them the new policy number and could they pull up the NCD proof internally!!!
They went on to say that they would cancel policy and web site prices were for new drivers. Went up two levels od supervisors. Backed off with theats of court for “breach of contract” no change in circumstances etc.
Its a rip off, Its just like all companies from Energy, telephones and TV providers. Shop around use the same company if needed, just make sure they have accepted your money first
While many of you do complain about the price increase including myself (not happy that my insurance went up by nearly £100 YoY) i must say that this is done by British people. Those who voted leave EU knew more or less that leaving EU meant increase in prices, Telephone, Mobile, Electricity and not least food cost. We will see an increase in cost across everything and this will not stop, the challenge will be what do you do when cost does go up but not your income???
My advice to anyone here who reading this is, always always always change Insurance company and never accept renewal price as it is a rip-off.
I’ve had a clean licence for well over 40 years. Nil claims, nil points, not so much as a parking ticket. By driving carefully. So YES I DO object very strongly indeed to subsidising careless drivers who aren’t as careful. Those who just don’t give a toss about other road users.
My solution has been quite simple for many years. A small, proportionate rise is acceptable. More than 5% and I cancel my policy immediately and never use that company again. It’s just sheer greed by the insurers.
Leave lawful drivers alone. Put premiums up substantially for those who don’t feel the need to bother being careful. Hit THEM in the pocket, not US.
I’ve just bought a new Nissan Qashqai….I went through Direct line website as a new customer…came up with £200, thought that can’t be right, so phoned them up. Explained that I already had a policy with them, and that I wanted to change if over to the new car….they wanted and extra £67 from me….on top of the £257 I paid for my 16 year old golf two month earlier, when I said that their website had quoted £200 they guy went away and came back with £22 extra…then he said he would look at the breakdown cover, and said oh we owe you £15 refund.
Now I have to insure my brothers car for him which is a 2005 Mondeo….was told by one insurer that it’s only worth £700….then to be told that the insurance would be £1,8000, and that was their cheapest!!….How can these b*****ds rip us off like this?
Has anyone tried Hastings? they come up with different prices all the time, and when I try and buy the policy on line, there’s no button to buy the policy…so you ring them, and no-one answers!!! ahhhhhhhhhhhhh
I’m afraid it’s more a question of greed and inefficiency than anything else. Someone damaged my parked car last year, and of course this was a “no fault” claim to me. My insurer then processed the claim through a series of other companies who each did this and that to the process, adding to the overall cost. That started with an assessor who came in with a ridiculous estimate (£2100, I finally had the car repaired to my satisfaction for about £700 – haven’t we all heard the question “is it an insurance job?”), while another provided me with a hire car I didn’t need or want, and even charged me a service fee for putting fuel into it. It seems to me that the insurance world is populated by small outfits hanging on and feeding off the bigger insurers, each adding their own costs as of course they must. It stands to reason that if each insurer kept sensible and proportionate costs in mind and managed the issues more in-house, thus getting rid of the hangers on, we drivers would be better off.
My renewal a few weeks later was a silly amount, a 25% increase or thereabouts. This following a no fault claim? I told them goodbye. Maybe we should all be a bit harder on our insurers? Even Company car drivers, who often dont care what their car costs, will have to care one day when they come to insure their own vehicles.
I have my renewal in 466 against 455 last year. NCB ? What is going on ? I want the select committee to ask the MIB to look at this. I drive careful and need to know why I am paying more each year. I do not want excuses about others and people who are illegally on the road. The police should be paid to remove them, a scrappage scheme going into the Police coffers.
Getting back to having traffic officers again. Why do I bother with insurance, VED etc ? Well I know that slowly we are under the camera’s eye coupled with computers. You would soon get told by a letter in the post or a visit to your door. Insurance is a system overdue a rethink. Careful drivers need less premiums and not paying for the insurance bosses Porche or DBS.