Why Has My Car Insurance Premium Increased?

Tuesday, May 3rd, 2011 at 4:49 pm

Have you got your car insurance renewal letter in the post? I got mine today and guess what? An increase of £200! My policy rose from just over £550.00 to £750.00.

Immediately I thought it must have been some sort of error so I got on the phone to my insurance company. After 10 minutes on the phone explaining that I had 10 years no claim bonus, I managed to get £30 off the price.

I wasn’t going to take this so I told them I would ring them back. So next off, I went to the price comparison websites. You know… Compare The Market (or is it Meerkat?) and Go Compare etc etc. Surely I could get a better deal… But once again, the prices were extortionate!

I was being quoted anywhere from £780 to £1640 for my insurance. The strange thing is that my current insurer who quoted me £750 originally, came in at £835 on the comparison websites. It makes you think how much money these price comparison websites actually make.

To make a long story short, I went with my current insurer because it was the best deal on the market but it begs the question: Why am I paying more for my car insurance?

From doing a bit of research it appears that UK car insurance is rising at the fastest rate since records began!

Over the last year, car insurance costs have rose by around 40% with the average car insurance premium for comprehensive insurance, now just under £900. And don’t be thinking that third party, fire and theft policies are any cheaper. These type of car insurance policy’s are usually taken out by young drivers. Because they are statistically a higher risk on the roads, the average insurance policy for this type of insurance, now stands at just over 1.5k.

I remember my first insurance policy. I took it out when i was just 18. (about 10 years ago) I was being quoted crazy figures. I remember the AA quoted me £5000 for my 1988 Nissan Micra. I bought the car for £400 for goodness sake.

These rising insurance costs are leading to more people withholding information when getting a car insurance quote. They hope by providing false information that they will get a better rate on their insurance. But this doesn’t work as it simply piles on costs for insurers and results higher insurance premiums for other drivers. Not to mention if you do make a claim, you may not be eligible to receive any money if you have provided false information.

So lets see what we can do to cut insurance costs. The best tip has to be to shop around. Despite my experience, shopping around for the best deals can save you hundreds. Online comparison tools can cut down the work but once you find the best deals its worth ringing the company’s directly to see if you can get a better deal.

Once you have a few different quotes you can also start to play one provider against another to get the best discount.

Playing around with the excess on your policy can have a dramatic effect on your insurance premium. The higher the excess, the lower the premium…usually.

There is certainly no way that you can get away from the fact that your car insurance will rise, but you don’t have to lie back and take it. Chances are there is a better deal out there if you are persistent and take a bit of time to compare and haggle with different insurers.

Why Has My Car Insurance Premium Increased? is an original post from Free Debt Advice UK