2016 UK car insurance industry watch covers the most important news stories, trends, research, opinion and developments for 2016.
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Costs of Motor Premiums Still Rising…….
2016 saw the old chestnut of rising motor insurance premiums rear it’s head again! Stats from analysts Consumer Intelligence suggest that car insurance premiums rose by 13.5% in the 12 months to August 2016, with the average premium costing £788, compared with £696 the previous year. The AA said premiums were driven up by continuing problems with whiplash claims and consumers’ growing tendency to shop around for a new policy each year.
There was some good news on this front during the year as The Financial Conduct Authority (FCA) is now going to force insurers to inform policyholders what last year’s premiums were, which means they will no longer be able to slip through their price increases on those of us who are sticking with the same motor insurer every year.
Maybe in light of the above we will start to see some car insurance companies offering us a competitive new rate when the time comes to renew our policy. Currently the average price levy on motorists renewing their policy with the same insurer is about a 10% increase in the cost of their premium year-on-year.
Surveys conducted through 2016 have also shown that many consusmers are actually unsure on what the term ‘fault’ actully means when making a claim on their car insurance. The smallest of prangs can cause up to a 39% hike on your next premium, even if you were not at fault for the accident! In fact the definition ‘fault’ as laid down by insurers is often at odds to what most of us would define as ‘being at fault’.
Some argue that the UK car insurance industry is simply profiteering now as by 2025/2030 premiums are set to fall by up to 40% with the widespread introduction of telematics and driverless cars. This seems a valid argument albeit without any solid evidence as for sure the outcomes for motor insurers of the gathering pace of vehicle technology are still unknown.
There can be no doubt that cars are getting safer. With humans being responsible for about 90% of the accidents on the roads, the introduction of driver aids such as lane assist, self parallel parking, traffic jam assistant and more, accidents numbers are dropping. The vehicle risk profile is going to change, and it’s going to get safer. This is not only good news for motorists but also for pedestrians and other road users.
ENDS