2024 UK car insurance industry watch covers the most important news stories, trends, research, opinion and developments for 2024.
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2024 – Young Drivers Tempted into Fraud as the Cost Of Premiums soar
Record high costs of car insurance could tempt more young people to commit fraud, the industry has said. Recent data showed average policy quotes for 17 to 24-year-olds stood close to £3,000. But the Insurance Fraud Bureau (IFB) has warned against “fronting”, where someone is added to a policy as a named driver when they should have one of their own, in order to save money.
Fronting is fraudulent and the IFB says it is never worth the risk. If evidence of fronting is found, it would invalidate your insurance policy and could result in a criminal conviction.
Typically, insuring younger drivers has always cost more because of the risks associated with their inexperience. Often, they are added to their parents’ policy as a named driver even though they are the main driver of the car. The Association of British Insurers (ABI) says a main driver just has to be the person who drives the car the majority of the time. An IFB survey last year revealed a quarter of 18 to 24-year-olds would find it acceptable to lie on an insurance application to save money – although many may be aware that fronting is illegal.
Insurance for young drivers often outstrips the cost of a second-hand car, the usual vehicle for those who have just passed their test. These costs may be having an impact. The numbers of driving tests being taken by young people has dropped in recent years. In 2019-20, before the first lockdown of the pandemic, 520,505 tests were taken by 17 and 18-year-olds, according to the Driving Vehicle Standards Agency. But in 2022-23 that figure fell to 504,718.
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Are you Changing Your Car? How to Change Your Car Insurance Also
Are you in the process of changing your car? If the answer is yes and you are concerned about changing your car insurance over to the new vehicle then read on for guidance on how to do this. Trading in your existing car for a shiny new one is exciting, but before you take to the high road in your new motor, you will need to let your UK motor insurer know you need car insurance for a different vehicle.
Informing your insurer will help to make sure you don’t end up uninsured, which is illegal and will leave you high and dry should you need to make a claim. The government is hot on uninsured drivers and with automatic number plate recognition technology in force throughout the UK it is highly likely that you will be picked up and prosecuted for driving an uninsured car.
Police forces up and down the UK use ANPR (Automatic Number Plate Recognition) technology to help detect, deter and disrupt criminal activity at a local, force, regional and national level. This includes travelling criminals (those using the road network to avoid being caught), organised crime groups and terrorists. ANPR provides lines of enquiry and evidence in the investigation of crime and is used by forces throughout England, Wales, Scotland and Northern Ireland.
Anyone driving without insurance can be fined, have points added to their licence or even have their car seized. When buying a new car, it’s not usually necessary to apply for a new insurance policy, as almost all insurers will allow you to transfer your current cover to your new wheels. But it’s really important that you inform your insurer when you need the terms of the cover to change. If you don’t, your policy could be invalidated, and any future claims could be rejected, or at the very least paid at a reduced level.
How do I transfer my policy to a new car? To transfer an existing insurance policy to a new vehicle, all you need to do is call your insurer.
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Car Insurance Loophole?
Martin Lewis unveils simple car insurance loophole ‘everyone misunderstands’. Martin Lewis has revealed a car insurance rule that motorists may not be aware of, preventing them from making major savings.
The Money Saving Expert founder revealed how insurance firms get away with charging existing customers more despite a ban on price walking. Martin stressed companies have to charge existing policyholders the same rate as new customers obtained through the same channel. Meaning, the rule allows for new customer rates to fall using different websites despite securing a similar or almost identical policy.
When it comes to getting car insurance is never auto-renew. Each year your firm will send you through a renewal. They use the fact that you must have car insurance in place if you own a car to say, you know, this is the day it runs out and you legally have to have it in place the next day.
As soon as you get that renewal, or even better, put a note in your diary beforehand. You should be checking if it’s possible to get cheaper car insurance elsewhere. If it is, you might want to switch or you might want to go back to your original insurer and say: Hey, my renewal quote with you is 600 quid. I can get an identical policy for 400 quid elsewhere. I’d like to stay with you, please will you cut your price? And that haggling does work.
Martin Lewis states: “Price comparison sites included in this ruling that you can’t charge existing customers more than new customers. But, this is the bit everyone misunderstands. The rule is channel-specific. “So the rule says you cannot charge an existing customer more than a new customer who went through the same route as that existing customer did originally.
“So if you went direct you cannot charge them more as a direct customer. If you went via a specific comparison site you cannot charge them more than a customer of that specific comparison site. “The crucial wording here was instead [you] went to a special new comparison site, so by definition, you could have not gone to it in the past because it was new. “Therefore because you must have gone via a different channel in the first place because it is not the same comparison site, the rule does not apply.”
The FCA claimed removing the loyalty penalty would save consumers a staggering £4.2billion over 10 years. Martin stressed this is exactly why customers should still shop around for a better deal ahead of renewal to make sure they secure the best rate. “Those people that think price walking and loyalty has gone because you must always be charged the same as a new customer, it’s only going through the same route that you did.
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