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

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

Insurance Aggregators and Price Comparison Websites for Specialist Car Insurance

The competition is hotting up on the aggregator price comparison sites with waves of TV adverts from the big four; Moneysupermarket, GoCompare, Confused and Compare the Market.
It is partially the marketing spend of these companies that keeps Independent TV and Google in the UK, firmly in the black.

At the time of writing the one that seems to be making all the TV noise is GoCompare!



Leaving aside that awful TV ad to the tune of Over There! We thought it is a good time to review their current car insurance offerings, which are particulary good for new car insurance and in relation to their specialist car insurance services.

gocompare.com is the insurance quote comparison site which will get you loads of quotes for your car insurance without you having to do all the hard work. All you need to do is enter your information once and we’ll do the rest. Independent choice, no messing about.

Review over 1000 car insurance prices, FREE of charge!





It is always worth visiting a few aggregators or insurance quote comparison sites before commiting to car insurance. There are also some smaller specialist car insurance comparison websites out there such as classic car insurance scheme comparison website Car-Insurance.tv. It's worth searching around for schemes for your particular car if you want to save loads of money on your annual premiums!

specialist 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

Compare Specialist Car Insurance at a specialist centre!

Have you gone on one of those big car insurance comparison sites and got halfway through the form filling, only to be told that they can't quote you? Yeah me too! This accompanying post shows how you can avoid the time wasting and still benefit from a large car insurance comparison system, even if you have unique specialist car insurance requirements.

Specialist Car Insurance is the Answer If You Have Been Declined by a Comparison Website
By Dave Healey

Often these large aggregator sites fail to provide a reason for why they cannot cover your car. Some of the better ones will provide a telephone number where you can repeat the quotation process over the phone, however with these type of companies you still run the risk of failing to obtain cover even if you talk to them direct.

Most Car Insurance companies that offer quotes on standard comparison websites, have very strict underwriting criteria that the risk, that is you and your car, must fit into to be offered a quote from the online computer system. This is the case for nearly half of the UK population visiting a major motor insurance comparison website.

What those who purport to compare the market often fail to tell you when you start to apply for cover, is that if you do not fit into the type of risk that they are looking for, determined by the answers that you give when you fill out the application or proposal form, that you will have been wasting your time!

Many people searching online for various motor insurance covers, come away disappointed at not being able to insure their car or vehicle, as quickly and as easily as was suggested on the television advert, because the comparison company failed to mention that if you cannot tick all the boxes on the form, you are a non standard risk.

Many more customers that the mainstream car insurance comparison sites fail to satisfy, then take up first quote they are offered from another source, even if it is very expensive, because they fear they will not get cover elsewhere.

Car insurance companies employ people called actuaries who constantly check statistics and data to come up with rates for various risks.

The actuaries and the underwriters set the risk rates for certain groups of people or car combinations. Consequently many people who do not fit the standard that the actuaries and the underwriters want, find themselves either completely excluded from the quote process or given a quote offer that is so expensive, that the risk in question will not take out the cover, and does not enter and threaten the value of the existing risk pool.

Others continue to pay over the odds for their car insurance, knowing they are non-standard risks, grateful to have found somewhere that can cover them. Many mostly through inertia, laziness or a misguided loyalty bordering on Stockholm syndrome, continue to pay over the odds for car insurance premiums, failing to realise that an hours work searching for alternative cover online, could make them hundreds of pounds or dollars in premium savings.

There are two overall reasons or factors that make someone a non-standard risk, these being, you as a person and the car you drive.

The risk price you pay for your car at a comparison site, is largely determined by the risk group assigned to the particular make and model of the vehicle. Every car in the UK is assigned to a risk group for rating purposes from one to twenty, twenty being the highest risk, typically high performance expensive fast sports cars. The higher the risk group the more you pay. Many online insurance comparison systems exclude high risk groups above fourteen for certain combinations of factors and will fail to quote.

Additionally any changes or modifications to a standard car, will change its risk group and may result in a failure to quote online. Age of a vehicle whether it be a specialist classic car or a brand new motor will seriously affect the risk price and may lead to exclusion from the quotation process.

Although the majority of cars are standard, people are not. Variations in human characteristics account for the main reasons people fail to get quoted from a standard car insurer. These can be age and gender related, where you live and what you do for a living. Many occupations will exclude you from online quoting and certain providers offers specialist schemes aimed at differing age groups. Theft rates for the area you live in may also result in a decline to quote .

The solution to the above problems in trying to obtain a reasonable car insurance quote, is to visit a specialist broker or motor insurance underwriter. They will have individually designed specialist car insurance schemes to cater for all those nuances that the comparison sites decline to quotes for. Furthermore because the risk quoted for is the actual risk and not a grouped risk, you may well find a lot more change in your pocket than if you had visited a standard mainstream insurer.

It is now possible to combine the benefits of comparing car insurance quotes and specialist car insurance. The Internet has allowed the development of specialist motor insurance comparison sites where multiple schemes are compared for non standard risks. Lancaster Insurance specialist car insurance and classic car insurance comparison website, is one good example.

Article Source: http://EzineArticles.com/?expert=Dave_Healey
http://EzineArticles.com/?Specialist-Car-Insurance-is-the-Answer-If-You-Have-Been-Declined-by-a-Comparison-Website&id=2360820