SE22 Car Insurance cost up 71% from last year

[rowerdk]

I have just had my car insurance renewal letter. The premium offered for the coming year is 71% higher than last year and I have not had any accidents or fines. This is outrageous but it appears to be the case for most insurance companies when I check the comparison sites.

Just wondering if SE22 has been classified as a more risky area. Anyone have similar experience???

[Hackblade]

Yes - told Direct Line to stuff it when my renewal quote came only to skulk back with my tail between my legs a few days later when I couldn't find anything cheaper.

It went up a similar amount to yours despite me not making a single claim.

[jimbo1964]

I think in the wider world insurance companies are taking a pasting (flood, earthquakes, oil rigs etc) so I guess they're passing their losses off down the line.

[MrBen]

The classes of insurance that cover natural disasters (Marine, commercial property etc) are usually ring fenced within composite insurers from "personal lines" (home and car insurance) so the effects of these on your average car owner are negligible. Insurers also have to ensure that their lines remain competitively priced so don't have too much leeway.

Far more likely is a rather dull concept called the insurance cycle - which relates to the availability of capital available to insurers and the forces of market competition on profitability over time.

Still awake? Then also note the recently reported shake up in the motor insurance industry as the EU are about to declare that women cannot be charged lower premiums than men by virtue of sex alone. Historically women have been charged lower premiums as statistically they are less likely have an accident and so insurers have priced on that basis.

The new ruling will likely come into effect in a year or two but will force all insurers to change their pricing model (you may find that your premiums fall again at that time).

[Burbage]

Possibly. But there are many ways to calculate risk, and sex is just one of them. Besides, that angle isn't in effect yet. As far as I can tell, referral fees seem to be a stronger suspect - as alluded to here, and dealt with in considerably more depth in the 2009 Civil Litigation Costs Review.

What's happened is that accident claims are now big business for all sorts of people - solicitors, repairers, courtesy-car hirers, claims managers etc. - and they're all paying, or being paid, to pass the work around. These are the referral fees. And the higher the fee, the better chance of getting the work. Better still, as one insurer or the other picks up the tab for all of it, there's no reason to stint on the bungs.

Add to this the cost of 'after-the-event' insurance (the insurance that solicitors take out to cover their losses in no-win no-fee cases, which isn't cheap) and the 'success fees' (which they get if they win, and aren't small) and a teensy bit of whiplash can end up costing an insurer a fair bit. And sure, insurers can insure against that, too, but by then you're just stirring the same puddle, and as it's all been robbed from your premiums in the first place it would make no practical difference.

The 2009 report broadly recommended the abolition of referral fees, and also recommended that ATE insurance premiums and success fees shouldn't be recoverable from the loser. And fine recommendations they are too. It's nice to see that the government is thinking about considering them, at last. But I don't suppose anything will happen. Not before the legal industry has found a suitable workaround, at any rate.

[trizza]

SE22 is classified as "high risk" for the purposes of car insurance (along with most of SE london).

Burbage - Ken Clarke announced some major changes to the CFA regime last week. "Success fees" for claimant lawyers are to be capped at 25% (not the 100% that is routinely charged). These cannot be recovered from defendants, but will be paid out of Claimants' damages awards (these will be increased by 10% to take account of this). There are also moves to make more claims be heard in county court (cheaper) and encourage parties to settle out of court. Unclear what is happening about ATE premiums.

The above will certainly help curtail costs.

[njc97]

MrBen - is right, the insurance cycle together with low interest rates will have pushed up prices. Also there has been a rise in recent years in the number of uninsured drivers and also fraudulent claims - all these things mean that insurers are pushing up their prices.

[will dex]

After a recent incident damaging 3 panels on my car my insurers legal agent arranged the repairs and the hire car. The cost of the hire car alone was ?13,000.... plus the charge to the guilty party for the referral.......plus the actual repairs...... I think i know why premiums are UP..

[joel devlin]

In the last 12 months on our street I have been told of three car windows smashed, one hit and run, two attempted house burglaries and one house burglary.

Se22 High risk? You'd better believe it.

[Sue]

will dex Wrote:

-------------------------------------------------------

> The cost of the hire car alone

> was ?13,000...

xxxxxxx

Eh? What on earth was it, made of gold??

:-S

[SCSB79]

I wouldn't say that car insurance is in a "hard market" per se... that is when demand outstrips supply and generally relates to the property/casualty market. It is usually triggered by a single event... the recent earthquake and tsunami in Japan may kick off a hard market in these sectors. The last single event to really effect the entire insurance industry was 9/11.

Also, I wouldn't say the demand for car insurance has changed so much over the past few years for it to have such a significant effect on the market.

The main factor behind the rises, as others have quite rightly pointed out, are mainly the numbers of uninsured drivers increasing and "no win no fee" actions that are on the increase.

[Wino]

A conversation (a year or so ago) with a friend who works for a large insurance co., revealed that most insurers have been selling car insurance "below cost" in recent years in a very competitive market. He stated at the time that this could not continue and eventually firms would have to start putting prices up.

[alec mac]

Hi Rower, was there any explanation for the increase in the renewal letter? south londoners have always had it hard with car insurance premiums but that's a ridiculously big hike!

[DJKillaQueen]

There have been a few articles in the press over recent days about increases in premiums being anything between 17% and 54%. The main reasons given by the industry are those mentioned above, huge increases in accident fraud and ambulance chasing. There also have been calls to end the legal trade of selling accident details to legal firms.

[jimmyraj]

You should try having an SE15 postcode - adds about 30% on top of the price for SE22, even though it's only a matter of a street's difference.

[AlexC]

Strangely my premium came down when I moved here from NW London (Queen's Park) at the end of last year. I was expecting it to be the other way round. I'm sure it will be going up at renweal time though - I think that's the case across the board.

[doublesj]

I think Wino is correct, due to fierce competition in the car insurance industry, it has acutally been loss making for about five years and lately all the big car insurers have been making steps to up their rates. The uninsured drivers do cost the industry, although if you are uninsured you'd probably drive more carefully.

I think particually the aggregator sites are not as cheap as they used to be, as some of the big insureres have chosen not to be listed on them because it costs them commission they have to pay these sites meaning that the premiums are in fact higher than if you went direct to them. Try Admiral if you have more than one car, as they offer a big discount. And it think Aviva don't use the aggregator sites either.

[peterstorm1985]

We tried all the comparison sites and the results were shocking. Went to Aviva and got a much more reasonable deal.

[trizza]

You should also try some insurance brokers. They often negotiate facilities with insurers that mean they can be cheaper than the insurers who underwrite the facility... (if that makes sense).

I have used Adrian Flux (no connection etc. there are others out there too) for a number of years and found them to be more competitive than any of the mainstream insurers and my policies have had the same bells and whistles as those provided by other mainstream provides.

[alec mac]

http://www.confused.com/featured-articles/motoring/car-insurance/breakdown-of-car-insurance-prices-april-2011-1984948326

that's a quarterly price index pulished by towers watson/confused.com. London's up 41% on average. It still doesn't explain the 70-100% increases I'm hearing on here.

[peterstorm1985]

Is that 41% increase on premium quoted, or 41% increase in premium paid? We changed insurer this year and our premium is approx 10% more than it was last year with a different provider. So, if there is someone on this forum who pays 72% more this year than last, the average of the 2 is 41%.

[alec mac]

I've been digging a bit deeper with this and I've been told that that 41% figure is actually calculated by averaging the price of the five lowest quotes. How on earth is that a fair average????

[alec mac]

peterstorm1985 Wrote:

-------------------------------------------------------

> Is that 41% increase on premium quoted, or 41%

> increase in premium paid? We changed insurer this

> year and our premium is approx 10% more than it

> was last year with a different provider. So, if

> there is someone on this forum who pays 72% more

> this year than last, the average of the 2 is 41%.

quoted.

[Miss P]

You could try Sheila's Wheels - silly name, but they have consistently provided me with good quotes. Tried the Post Office for a quote on my car last night & it was ?100 MORE than Sheila's for exactly the same cover.

[trizza]

I think Sheila's Wheels specialise in placing insurance for women?

Insurance for women used to be cheaper as they have better loss statistics. If you are a woman, you can think the ECJ for determining that insurers' practice of taking the sex of the proposer into account when rating the risk is discriminatory. This may mean the end of Sheila's Wheels' business model and could account for higher prices for women drivers.

Insurers will no longer be taking this factor into account so women can expect their car insurance rates to rise. If you are a young male (highest risk group) they should go down. See here: http://www.bbc.co.uk/news/business-12606610

So, if the stats are right a woman under 30 can expect a 20%/30% rise and a similarily aged man will see the premium go down by 10%. Not sure how long it will take for this to be factored into insurers' pricing models though.

Incidentally, men don't get it all their own way. As a result of this judgment pension annuities for men will go down as it appears they too are discriminatory, despite the cold hard fact that men do not live as long as women...