Car Insurance Premium Hikes Set for 2010

It looks like the UK motorist will be paying a lot more than what they have been used to for Car Insurance in 2010!

With both car insurance comparison website car-insurance.tv last week predicting a hardening market for and now the AA predicting massive premium hikes this is unwelcome news for both the private car owner and the UK economy as a whole, which hardly needs any more inflationary pressures.

Owners of specialist or expensive cars are more likely than the competitive middle market, to feel the brunt of the car insurance premium hikes.

Here's what Insurance Blog has to say on the matter..........

UK Car Insurance Rates Must Harden As Loss Making Companies Claims Reserves Run Dry!

Incredibly Car Insurance companies in the UK are struggling to make a profit and 2010 is likely to see a large reduction in the supply of car insurance, with many famous brands and suppliers predicted to disappear from the high street and our television screens as the market adjusts to cater for the massive losses, according to analysts from car insurance comparison website Car-Insurance.tv.

Recently released figures show that the UK Motor Insurance market has been consistently losing money since 2004 when the total UK profit from underwriting car insurance policies was £77 million.
In 2007 the UK car insurance market made a £1.1 billion underwriting loss, last year the loss was £1.3 billion and the figures for 2009 are expected to be worse........

Very few car insurance providers have escaped the losses and are profitable, whilst many have released claims reserves held from previous profitable years to disguise the 'actual ' loss.

So what is causing such massive losses in a large compulsory market that not so long ago was the most aggressive in the world?

On the face of it the answer appears to be simple ...... The Cost of Claims!

Claims are the problem not because the Car Insurance Companies have failed to include the rising costs of claims into their pricing structures; but because they have failed to cover the true costs in the retail price!

Car Insurance underwriters seem to have forgotten the basic rules of betting when setting their prices - and that is, that the Bookie never loses.......

To understand where the car insurance underwriting companies have gone wrong you first need to examine how they arrive at the price of a car insurance policy premium.

The cost of your car insurance premium is basically made up of three components:

1. The costs of production - Staff, Systems, Distribution etc
2. The costs of losses - known claims ratios ( the proportion of a policy premium pool that gets eaten up in claims)
3. Profit

The cost of all these components can be calculated by clever people called actuaries who work for the insurance companies and the rates set accordingly.

So what's gone wrong?

Well naturally it is obvious to first look at claims as the cause of the losses - but the truth is far from this end of the life of a car insurance policy......

The frequency of claims has either fallen or remained fairly constant over the period of losses and the actual cost of claims has only risen by 1 percent.

Despite all the noise made about gangs of car insurance claims fraudsters roaming the streets of the UK, the fact of the matter is that most of this is propoganda aimed at deterring fraud which naturally rises during a recession/depression. The number of fraud cases are really insignificant in the true scale of the market to affect pricing.
Admittedly there has been a significant increase in the number of personal injury related claims, egged on by claims farming companies, which would affect long term pricing, however the losses experienced by Car Insurance companies are nothing to do with claims and claims pricing.

These type of claims fluctuations have always been dealt with successfully in the past by car insurance companies by adjusting reserve ratios or negotiating better re-insurance ( laying the risk off), or more importantly by adjusting price ........

But this time something is different....

Car Insurance Companies can no longer set the price! Not if they want to win the business anyway!
And they certainly cannot sell policies at the premium levels that the Actuaries suggest!

Why? Seemple .......The Internet!

And more importantly Car Insurance Price Comparison websites or aggregators as they are known in the industry, which account for around 90 percent of the Car Insurance sold online. Since around 2004 it has been possible to easily compare car insurance quotes online from numerous suppliers, and invariably the cheapest premium wins the business.

Car Insurance companies not longer set their own prices! And this is the problem!
In a race to achieve enough volume to make a book of car insurance business profitable the car insurance companies have been selling their car insurance polices too cheap and covering their losses with their claims reserves........time is running out!

For the consumer then as we enter 2010 it looks as if the best policy is still to visit comparison websites where you will be offered a choice of suitable policies at the most competitive prices.
If you stay with your current insurer - expect large premium hikes at renewal!
Shop around for specialist car insurance as prices are going to vary widely.
Visit a specialist car insurance comparison website as there will be many offers to be had as companies try to secure volume of car insurance policies.

specialist car insurance

Get Specialist Car Insurance If You Need Specialist Repair Services

When buying car insurance policy it is essential to look at what is offered should you have an accident and need to a claim.
After all, you are only insuring the car to have the potential to make a claim should the worst happen and the cover is only as good as the insuring company's claims department.

With the hardening of rates in the UK car insurance market and the recession, price is most peoples consideration when purchasing cover, but one of things you should not overlook is who is going to repair your car if it is damaged in an accident and you need to claim?

This is especially true if you own a non-standard car? Non-standard are cars that don't fall into the mainstream set that the large insurance companies like to cover. Surprisingly a large number of vehicles fall into categories that the majority of mainstream insurance companies do not want to cover!

Such examples that may struggle to obtain motor insurance at reasonable rates are owners of high performance, prestige, expensive, luxury, grey and foreign imports, kit cars and q plated cars, sports cars, convertibles, muscle and modified motors, vintage, veteran, collectors and classic cars.

More importantly if you are the owner, if something happens and you need to make a claim on your policy, it is important that your car gets fixed by specialist professionals, using the correct parts and not cheap substitutes. More often than not these type of car repairs require unique tools that are only available through specialist engineers and motor engineering repair shops that deal with particular models.

So it is most important when comparing car insurance to also compare the services that a car insurer offers in the event of a claim, especially those regarding choice of repairer. Bear in mind that cheap car insurance bought through a car insurance comparison website offers no claims services and it will be up to you to fight your corner in the event of a claim, if you don't agree with what the insurer is offering as recompense.

All specialist car insurers and many insurance companies will offer a choice of repairer - many others will not as they have existing arrangements with so called approved repairers.

Trouble arises when an insurance company insists on employing a particular firm to fix the car against the policyholder's wishes, and it is not uncommon for major disputes to arise at this point.

For example, the insured may have an expensive Italian sports car bought from an exclusive importer and specialist firm of dealers who added a number of accessories and or modifications to the car at the insured's request at the time of sale; the same firm may have performed all the routine servicing since the sale and the insured may genuinely feel that they 'know' his car better than anyone else could, and that only they, in consequence, should be entrusted to carry out the repairs.

If the repair work quoted in an estimate by the specialist firm is substantially higher than that expected from the approved repairer and the car insurance claims department consider that the approved repairers are capable of carrying out the work to the same standard as the specialists , then the only way out of this impasse is usually for the insurance company to suggest that the insured pays the difference!

Clearly then it is very important to understand what you are buying with your policy when it comes to claims and repairs. Specialist car insurance policies always offer unique claims repair services and if you own an unusual, expensive, classic car or performance motor, then it would be sensible to opt for a specialist classic car insurance or performance car insurance policy, that includes these repair services to avoid the above situations. What might look like a cheap policy might turn into fools gold in the event of a claim!

specialist car insurance

High Performance Car Insurance - Not just Ferrari Insurance!

Specialist car insurer Insuretec has announced that the latest of its specialist car insurance comparison systems, dealing with high performance car insurance is now online.

Spokesperson for the company, Patricia Powell, which operates the UK specialist car insurance scheme comparison website said,
"This new venture which brings together over eighty high performance car insurance schemes, and allows customers to compare products and tailor bolt on covers is a follow on the success of our make model insurance comparison applications, for example the Ferrari Insurance comparison.



Specialist Car insurance is growing and more schemes are being added all the time as various providers cater for more niche groups in an ever competitive market. Our website allows customers to get the best cover for the best price, and with the price of high performance car insurance, we beleive and our customers report that we are providing a valuable service!"

specialist car insurance

How to Find Cheap Car Insurance

Finding Cheap Car Insurance Online
By Dave Healey

Finding cheap car insurance can be like looking for a pot of gold at the end of the rainbow. Everybody is looking to make savings on their annual motor insurance premiums as the recession bites. We offer 7 proven money saving tips that will help you purchase cheaper cover online.

1. Improve you car's security to deter theft

Virtually all modern cars and newly bought vehicles have in built anti-theft devices and alarms. As long as they are approved by the UK Government testing agency known as Thatcham, you will receive substantial discounts for implementing one.
Extra and additional security measures such as window and glass etching of your cars number plate details and engine number will command further discounts with some insurance companies.

2. Pay for the cover upfront

You could save as much as twenty five percent on your annual premium charges if you pay for the whole years cover upfront, at the time of purchase. Most car insurers charge this amount in interest over and above the basic premium cost, for the privilege of paying for the cover in installments or by credit card. Additionally avoid untried pay as you go insurance schemes - you may be in for a very unpleasant surprise.

3. Do not change cover mid-term of the policy

It is also a wise move not to change your car insurance provider in the middle of the current policy term. Primarily it is going to cost you more, as canceling an existing policy will only get you a small return on your annual premium and not a pro-rata payout for the amount of time you have left. Secondly it is highly likely that car insurance premium rates will have hardened or risen over the course of a policy and changing mid term will only ensure you pay more earlier.

4. Do you own more than one car? Try a Multi Car policy

If you own more than one car and perhaps have separate policies for these or for your wife, partner or children it would be worth your while investigating multiple car or mini fleet family policies. You may be surprised at how much you can save on annual premiums if you insure multiple vehicles under the same cover. Quite often the cost of insuring two cars can be virtually the same as one, particularly if one car is much more expensive than the other.

5. Keep an eye out for Group Discount policies.

Many car insurance companies offer premium discounts on cover if you belong to certain clubs or are affiliated with certain organizations. When purchasing online keep a look out for affinity codes, usually your membership number, in order to obtain what are often substantial discounts for being a member of a certain risk group. Visit a specialist car insurance company or apply for your groups car insurance scheme through your motoring or leisure organization.

6. Take on some of the risk yourself!

You can substantially lower premiums if you take on some of the risk that the policy covers, yourself. You can do this by increasing excesses, which is the amount you will have to pay in the event of a claim before the insurance company pays out. Voluntary excess is one such example. Be careful to weigh up the costs of any excesses and whether you can afford them in the event of a claim. There are now certain 'value for money' car insurance policies such as the one offered by Tesco Car Insurance which have very high policy excesses in return for very litlle premium! These are good if you can afford the first 600 of any claim!

7. Improve your credit rating

Most online insurers as soon as they have your name and address will automatically make inquiries to one of the big consumer credit firms such as Experian. Before you have finished filling in the form the car insurance application will know whether you are credit worthy or not. If your credit score appears bad the insurer will probably weight the policy rates against you as they either do not want your business or perceive you to be a greater risk of claiming.

As with all insurance, you can be guaranteed money savings if you take the time and trouble to investigate alternative policies and compare companies cover and quotes on the Internet.

You can find out more about how to purchase, find and compare cheap car insurance quotes online if you visit a specialist car insurance website that compares multiple car insurance schemes and policies and offers you wider cover.

Original Article Source: http://EzineArticles.com/?expert=Dave_Healey http://EzineArticles.com/?Finding-Cheap-Car-Insurance-Online&id=2453854





Car insurance

Tesco starts its own Specialist Car Insurance Company

Tesco the UK's larget supermarket chain has finally take the leap and formed it's own Tesco car insurance company.
Tesco Insurance Ltd is half owned by Tesco and the other half by the underwriting company, Belgian Insurer Fortis. In the past Tesco personal finance, the financial services arm of Tesco, has had underwriting deals for it's car insurance with the Government owned RBS and UK Insurance.
In recent years the company has been marketing exclusively to the cheaper end of the UK car insurance market, particular examples include their 'value' range of cheap car insurance and motor insurance policies and their forays into the aggregator car insurance market with Tesco Compare; however, with the new company all this is set to change.



The success of these ventures and the new partnership, had led to growth into other areas of the more niche UK Car Insurance Market and our marketing department have noticed Tesco's spend on online advertising for the specialist and classic car insurance market has risen dramatically in recent months.
Whether Tesco will bring it's usual success to these specialist car insurance markets and become a classic itself, remains to be seen.......

specialist car insurance

Compare Classic Car Insurance