2010 UK car insurance industry watch covers the most important news stories, trends, research, opinion and developments for 2010.
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University Student Car Insurance
It’s that time of the year again when many university students across the UK are returning to campus or possible setting out for their first year at uni!
Obtaining a new student car insurance quote can be done quickly and effectively on the World Wide Web. However the internet has brought with it what often seems like an endless list of possible candidates for your business. Many insurers claim to offer the best package of features, benefits, options and most importantly price. Where do you start your quest?
Well the simple answer is to draw up a checklist of the type of cover you require, features that you require and then shop around for the provider that best meets your requirements. Finding the right cover for your car could save you money, and may help make your student loan go further.
You are probably aware also that car insurance rates for young drivers can be expensive. Statistics show that a high percentage of road traffic accidents involve young people and hence the rates often quoted by UK insurers reflect this risk.
Building up your no claims discount can also substantially reduce your premiums over the period of your university life. Driving sensibly, following the rules of the road and the Highway Code, staying within the speed limit will help you to avoid making any claim(s) on your motor policy. For those who are embarking on a university course and are aged between 17-25 please remember this sobering though – People aged 17-25 represent only 10% of the UK’s licence holders, but are involved in over 20% of all road traffic accidents. Every year over 1,000 17- 25 year old’s are killed as a result of a road traffic crash. These deaths are avoidable.
Lastly, if you are living off campus in an area where you are concerned about car theft, it may be worth installing additional security devices to your vehicle. A good insurer will advise you of suitable devices.
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Blinded By Xenon Headlights?
For a while now drivers in the UK have been complaining about being blinded by oncoming motorists whose vehicle have bright white Xenon headlights.
Anyone who drives at night will be well aware of how dangerous and irritating they have become. This included not just the badly adjusted ones but also the properly adjusted normal ones which can dazzle as they approach from behind.
It is the case that new cars fitted with xenon lights are required to have automatic self-adjustment to keep them level. Often, however these fail to react quickly enough or simply fail completely. In addition xenons set to dip left pose a hazard to drivers being overtaken because they shine directly into the door mirror.
If you are a driver of a vehicle with xenon headlights you might be aware of other road users flashing you? This may be because the level of your lights may have been incorrectly set? Currently The department of transport do not find it necessary to teach drivers of any vehicle how to set their lights so as not to endanger others.
Thus if you are driving with xenon headlights it would be wise and sensible to check that the leveling mechanism is set correctly and oncoming motorists are not being blinded by extremely bright white lights!
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Quinn Direct in Administration
There has been shock at the news that Quinn Insurance Limited has been placed into Administration in Dublin, Ireland with effect from the 31st March by order of the High Court.
A recent report from the Irish Times said that Mr Justice John Cooke installed Paul McCann and Michael McAteer of Dublin accountancy firm Grant Thornton joint provisional administrators to the company in the High Court after the Financial Regulator expressed serious concerns about the finances of the company and how it was being managed.
The administrators have confirmed that customers of the insurer will continue to have their claims settled and there is no change to the validity of policies. “The appointment of joint provisional administrators will better protect policy-holders,” the regulator said.
“It will allow the firm to remain open for business, to continue to be run as a going concern under different management and to put the business on a sound commercial and financial footing.” However, no new policies will be issued or renewed meaning other competitors will take advantage of unexpected new business during this period. This statement applies to policies taken up in Ireland and the UK.
In Britain UK Quinn operates Quinn Direct selling UK car insurance, van, home, fleet and business policies. In recent years, the company had made a name selling competitor insurance to provisional and young drivers. Free breakdown assistance was also included for vehicles up to 15 years old.
The news of the downfall of this established company will send shockwaves around the already fragile financial community which will do nothing to calm the fears of this industry.
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The Dangers of Driving Tired
Previously published research has shown that a staggering 17% of road crashes resulting in injury or death were sleep related. In addition – One quarter of all road crashes that caused death or serious injury were sleep related. Young drivers out partying or night clubbing take note – driving home in the middle of the night – can prove extremely dangerous.
The DfT continues to spend a lot of money on promoting the message ‘Think! Don’t Drive Tired’. The Department for Transport estimates that approximately 300 people a year are killed and many more seriously injured where a driver has fallen asleep at the wheel.
A Driving requires a high level of concentration and perception. These skills are greatly reduced however when you are drowsy. Your judgement is impaired and reaction times are dramatically slowed, meaning you are less likely to react to potentially dangerous situations.
According to road safety group Brake, nearly 50% of all motorists have admitted to have driven after getting less than 5 hours sleep. The bottom line is that if you risk getting behind the wheel not having had enough sleep you risk killing yourself and other road users!
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Young Drivers Delay Car Ownership?
Youngsters of driving age today are citing the ever increasing costs of running a car as the reason for delaying ownership, with over 40% of young people having denied themselves even the short step of obtaining a driving license. On the other hand..
Research has concluded that the current crop of young drivers are quite possibly ‘a generation spoilt’:
• Young drivers get their first car at 19
• First cars given as a gift for one in three youngsters
• ‘Old bangers’ a thing of the past – today’s young drivers have higher expectations
To mark the former point, motorists aged between 18 and 25 are now considering purchasing a car with a friend, over 10% having given the prospect careful thought and a further 15% believing it to be a good way to split buying, running, and young driver car insurance costs.
Nearly 1 in 2 young drivers that do not own a car said that their income level was not sufficient to allow for the necessary outlay, 2 in 10 said that their university costs was the prohibiting factor whilst 1 in 10 said that debt was their biggest problem.
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Cutting Car Insurance Costs Increases Risk Levels
It seems to be stating the obvious – that by cutting the cost of your car insurance premiums you are often having to reduce your level of cover and protection.
However this has increasingly become the norm for many motorists as the effects of recession bite deep into the financial pockets of motorists across the UK. The British Insurance Brokers Association (BIBA) have previously stated that more than a fifth of brokers surveyed confirmed that policyholders had reduced the level of their personal lines cover and are continuing to do so in the current economic climate.
Whilst the need to save money has become increasingly paramount, drivers should be made aware of the real costs of driving with lower levels of car and breakdown insurance cover. It’s an old adage, but make sure you research several motor insurance companies either before getting car insurance or when it’s time to renew. Your goal should not be to just chase down the cheapest possible price for your car insurance but to ascertain the maximum cover level at a price you can afford.
Consider the list of car insurance options and ‘add-ons’ that are offered carefully. Secondly, would it really be sensible to raise the excess level to an amount which would probably be unaffordable in the event of making a claim?
Highlighting the potential dangers of reducing the levels of cover in car insurance policies is an important message and UK drivers should seek proper advice from a broker before taking any radical cost-cutting measures!
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Toyota Re-Call Affecting Your Car Insurance Cover
Warning: Toyota owners who ignore the current recall notice could be uninsured if they are subsequently involved in an accident as a result of a throttle problem.
“There is a risk that they won’t be fully covered if it can subsequently be proved they ignored the recall notice”.
UK car insurance companies have re-assured the customers affected that their Toyota car insurance policies will remain valid as long as they return their vehicle to a Toyota dealer for the necessary upgrade to be made (see above). Known Problems:
Accelerator Pedal
There is a small risk of a problem with the accelerator pedal in certain Toyota models. If you have not experienced the problem, it is highly unlikely that you will. The recall being undertaken is precautionary as only a tiny percentage of the vehicles could develop the problem.
Third-Generation Prius
Toyota have announced a voluntary recall on the latest, third-generation Prius built before 27 January 2010. This will involve 8,500 cars in the UK and will consist of a software upgrade in the anti-lock braking system.
Toyota have increased their staffing levels and extended service centre opening hours to ensure those motorists involved are not expected to wait long, thereby causing unnecessary inconvenience or worry, and the upgrade itself is likely to be completed in around 30 minutes.
Note: You are responsible for keeping your car in a roadworthy condition. If it can be proved that you knew about the recall, ignored it and that the recalled part then contributed to an accident, theoretically you could be held partly responsible!
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Our illegal drug driver rate is amongst Europe’s worst says insurer
The leading cheap car insurance company More Than says it’s time to bring in on-the-spot drug screening devices to dissuade the increasing numbers of individuals driving under the influence of illegal drugs.
More Than research showed that, despite 90% believing that drug driving was unsafe, an astonishing 21% of the drivers polled had been behind the wheel soon after taking an illegal drug and 38% of those believed that their driving skills were not impaired by the drug. It is clear that drugs are seen as a lesser driving risk because 94% suggested they wouldn’t drive while over the blood alcohol limit. This helps make us the worst drug drivers in Europe.
One in 10 young male drivers admit to driving after taking illegal drugs. If you are a young driver or possibly recently passed your test and include yourself in the above statistic then beware: Anyone convicted of driving while unfit through drugs will get a minimum 12-month driving ban, a criminal record and a large fine.
The police can spot the signs that someone is driving under the influence of drugs. Once a driver has been stopped their eyes will give them away because of the obvious and involuntary effects drugs have on the body. Remember, your eyes will give you away!
If you think drug-taking has little, or even a positive, impact on your driving you could be tragically mistaken. It’s important to bear in mind that it can be hard to determine exactly how a drug will affect your driving ability – impairment caused by drugs can vary according to the individual, drug type, dosage, the length of time the drugs stays in your body, or if the drug has been taken with other drugs or alcohol.
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The Continuing Rise of Disgraceful Levels of Potholes on UK Roads
Yes we know that the recent cold weather with heavy snow falling on most parts of the UK can make the conditions of our roads worse but….
The conditions of roads in the UK and West Sussex in particular is shameful. Experts in road surfacing suggest that the type of road seen most often in the UK needs to be re-surfaced every 25 years. The average length of time a road is re-surfaced in the UK is – wait for it…. Every 80 years!? This fact goes along way to explain the appalling state of the roads that we now see in particular in and around towns and villages.
Motorists are now being warned, particularly by motor insurance companies of the dangers posed by potholes in the road. The Institute of Advanced Motorists (IAM) has also said that drivers should expect improving (weather) conditions to reveal further damage to roads, caused by the expansion of water as it freezes inside cracks in the tarmac.
The Institute of Civil Engineers highlighted the damage caused by so-called “freeze-thaw” cycles of cold and warmer weather, calling on the Government to help maintain roads as a “vital asset”. The Local Government Association (LGA) said that councils were “working flat out” to repair damage caused by the weather. I would imagine that most people know what a pothole is but here is a Wikipedia definition just in case
Pothole
Pothole is a type of disruption in the surface of a roadway where a portion of the road material has broken away, leaving a hole. Most potholes are formed due to fatigue of the pavement surface.
As fatigue fractures develop they typically interlock in a pattern known as “alligator cracking”. The chunks of pavement between fatigue cracks are worked loose and may eventually be picked out of the surface by continued wheel loads, thus forming a pothole:
• Potholes are now estimated to cause as many as 1 in 5 mechanical failures on UK roads and costing motorists an estimated £320 million every year.
• Potholes are a major factor in causing axle & suspension failure, which costs British motorists an estimated £2.8 billion every year.
• Authorities currently pay out more than £50 million in compensation claims due to poor roads.
• Road maintenance in England and Wales is under funded by around 50%, or £1 billion every year (see the statistic in the second paragraph).
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Car Key Security
Throughout 2009 statistics continued to show that there was a marked increase in the number of cars being stolen in the UK following the initial theft of keys during personal robbery or domestic burglary. Unfortunately the first couple of months in 2010 seem to show that this trend continues.
Drivers of all vehicles and particularly those motorists lucky to own prestige marques should be aware of keeping their keys safe at all times. Owners across the UK could be at risk of having their vehicles stolen to order – upmarket, performance or classic cars being regularly targeted by thieves using more sophisticated and violent methods, although any type of car is potentially at risk.
The figures show that more than 18,500 cars were stolen last year after the keys were taken by robbery or domestic burglary. Over 50 people a day had cars stolen in this way, as thieves become more sophisticated and violent in their methods. A further 2,900 drivers were robbed to obtain keys by, for example, mugging, pick pocketing or carjacking.
A spokesperson for AA Car Insurance has previously commented that this points to a worrying trend for upmarket cars to be stolen by more violent means. Pointing out that modern cars are almost impossible to steal without the keys. London is the area where cars are most likely to be taken as a result of robbery or burglary, followed by West Yorkshire, Greater Manchester and the West Midlands.
Nearly all UK car insurance companies are now offering specific advice aimed at the importance of keeping car keys safe in all situations and at all times. Be sure you access this information from your chosen motor insurance provider.
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