Car insurance news roundup: week ended 10 oct 2012:
As news that vandalism and road traffic accident figures are down emerged this week, experts question why car insurance rates are still creeping ever higher.
The AA says that the average motor car insurance premium price stands at almost £1,000 a year right now, despite the fact that not only has the number of car accidents resulting in bodily injury gone down consistently for years, but that instances of car-related crime such as vandalism and theft have plummeted as well. To top it off, car prices have gone down overall – and while all of these occurrences should logically lead to cheaper insurance premiums, that simply has not been the case, now has it?
There were less than 2,000 fatalities and 23,000 serious injuries on UK roadways in 2011. Compare this to a generation ago, where there were 5,217 fatalities and 60,000 serious injuries in 1990, and the argument that the country’s roads are getting more dangerous goes out the window.
Car crime has been dropping as well, according to the Office of National Statistics, which recorded 1.55 million ‘offences against vehicles’ in 1992. However, the ONS says that the 2011-2012 year saw only 417,000 of these same offences, there’s little to point to that says criminals are out in force, stealing or vandalising cars like they used to.
So how have car insurance companies operating within the UK become so broken? In essence, more and more of your premium has been going not towards covering thefts and accidents but towards losses from uninsured drivers, spurious car accident claims, and car repair and car hire costs that may be inflated artificially by insurers.
Things have gotten so bad that the Competition Commission recently announced that the car insurance market will be investigated quite closely for any signs of unfairness in premium pricing. However, with the Commission having a whole two years in which to complete their investigation and then report upon it, we may not see any relief or respite from unfairly high premiums any time soon.