Whilst it may not feel like it over the years, car insurance premiums has in fact fallen. But why is it still so expensive?
Every week, over 2,500 fraud claims are identified amounting to a claim amount which is in excess of £15 million. To combat this problem, insurers have an Insurance Fraud Register which holds all the information of known fraudsters. This register works hand in hand with the Insurance Fraud Bureau- in charge of detecting fraud – and the Insurance Fraud Enforcement Department- in charge of prosecuting fraudsters.
Home insurance claims are more frequent but car insurance claims are more expensive due to the number of whiplash claims. Currently the UK car insurance industry receives around 1,500 whiplash claims every day, which costs around £2 billion a year. Naturally this cost is then passed from the insurance company to all other law abiding motorists.
Nonetheless, to combat this issue, the government has made it easier for insurer to challenge a claim. It’s also possible that independent medical counsel may be available in the future to assess the claim but this is not in the present and whiplash injuries don’t show up on x-rays and other medical scans so it is very difficult to detect.
Continuous Insurance Enforcement
According to the Continuous Insurance Enforcement regulation, motorists who don’t have insurance and haven’t declared their car off road are liable for prosecution. In accordance with the law, DVLA car records are compared against the Motor Insurance Database (MID) to catch motorists who haven’t got car insurance all year round.
Should the motorist fail to get car insurance after that, they could get a fixed penalty of £300 and 6 points on their license. Should the matter progress to court, the motorist may be disqualified from driving and have to pay a fine of up to £5000. In some instances, the police may seize and destroy the uninsured vehicle too.
Age and experience is also a factor that is considered when insurers determine the quote for a driver. 1 in 5 young drivers end up in an accident within the first year of passing their test and around 1 in 4 accidents include at least one driver who is between the ages of 17-24. Given these alarming stats, it’s no wonder that young drivers get some of the most expensive quotes in the car insurance industry.
The type of job you have also affects your premiums, for example a stunt driver will see his premium to be higher than some who might work in a library. To add, if your car is being used for business purposes than the conventional motor insurance will not be sufficient as that only cover social, domestic and pleasure use only. For business car insurance, you will need to contact the insurer separately to let them know else, they can refuse to pay out on the claim.
Type of Car
The type of car you drive makes a massive difference to the car insurance premium you are quoted.
Every car is categorised by insurance groups of between 1 – 50, with 1 being the cheapest to insure and 50 being the most expensive. Some of the factors which determine the category of the car include engine size, cost of repairs and acceleration power. You can obtain more information by visiting www.thatcham.org.
So if you are driving a Porsche right now and then changing your car choice to something more conventional will most likely save you a lot of money on your car insurance.
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