Friday, 10 February 2017 09:06

Car insurance claims go down, so why are premiums going up?

It’s as much of a talking point in this country as the weather is – Car insurance.

Car insurance and the ridiculous premiums that come with it is one of the most angry topics of conversation that you will ever have with a British man or woman.

It is something that everyone legally has to have, and because of this it doesn’t sit very well with people when they are told that their car insurance is going up again.

What’s more frustrating is when car insurance goes up and drivers haven’t made a claim. How can this be fair?

This brings us onto the latest news that car insurance as a general area is going to increase again, this is despite car insurance claims going down on the whole as well as whiplash claims. So, with this mind you may wonder why premiums are going up. The same question has certainly occurred to us.

The top and bottom of it is profit. Just as with any company it’s all about making money. Regardless of whether car insurance claims have gone up or down, insurance companies will always seek to make a profit so claim figures are irrelevant ultimately.

There is also a lot of extra regulation put in place these days with regards these companies and this will ultimately take some money putting into place.

There are also some other weird and wonderful reasons why car insurance is creeping up and we bet you’d never believe any of them if we told you. You might want to bear a couple of them in mind if you are looking to get costs down. Every penny counts if costs are seemingly rising for no apparent reason.

One of the things you may be aware of already is if your car has been modified in any way. If your car has been lowered, tyres have been changed to a more sporty profile or you have made it look different such as having art put on it, then your insurance will more than likely be higher than it would’ve been had the car been in its normal state. In some instances, some insurers will not even insure you. So it may be worthwhile not bothering with any of this if you want to keep insurance costs down.

There are also other things too. Have you ever wondered why when you renew your car insurance they want to know everything about you? Your shoe size, what eye colour you have. Ok, so maybe we’re being a little over the top, but they do like to know quite a lot about you. Often, they will ask you what your occupation is and where you live and whether or not you own your own home or rent. You may think that this is just the insurer being nosy but in actual fact the answers that you give will have some bearing on how much of a premium you will pay.

It may seem illogical to us but your premium is likely to be higher should you rent your home as opposed to if you’re a home owner. Why? Believe it or not, but if you’re a renter you’re deemed to be more of a risk-taking driver than someone who owns their own home...baffled? We are too.

Ultimately you can’t win. It’s forever been that car insurance is something you’ve just got to accept. It just doesn’t seem fair though does it? Why should premiums continue to rise when claims including whiplash are going down and people are driving ever safer cars.

Car insurance is a little bit like energy prices. No matter what practices you undertake to get it cheaper, they’ll just keep putting prices up and stinging you – and why wouldn’t they when they’re allowed free reign to do so.

People have even tried buying older cars to get their insurance down; thinking that driving around in newer vehicles may be hampering their insurance cost-cutting - but this is something that the insurance companies have got covered too. If you drive an older car, they assume that it isn’t as safe in terms of both a crash and break-ins so it will be at a higher premium because it is less secure. They also take the view that you will be less likely to look after it and park it anywhere for example, so a premium gets added on for that too. 

As we said, you can’t win. It’s all very frustrating though when they’re clearly just raking in the profits.