Are rates poised to increase yet again?

CAR INSURANCE NEWS ROUNDUP: WEEK ENDED 10 APR 2013:

Market conditions for insurers have been in flux lately, and this could mean that our car insurance rates are going to end up creeping higher yet again.

First, it looks like that there car sales for the month of March were up by 5.9 per cent, partially driven by the new ’13’ number plate being introduced. Nearly 395,000 new vehicles were registered last month, according to new data revealed by the Society of Motor Manufacturers and Traders, bringing the total 2013 first quarter sales figures to 7.4 per cent higher than the same period of time last year – an increase of more than 605,000 vehicles.

This is of course fantastic news for the car manufacturing industry in the UK, as increased sales lead to higher profits. Of course the flip side of this particular coin is that with the number of registered vehicles on the rise the demand for motor car insurance is sure to increase as well, which could very well result in heightened premium prices as insurers feel they no longer need to provide as competitive a deal as they might have last year.

On top of that, the amount of cash insurers are paying out in false accident claims seems to be growing as well, and as car insurance companies experience increased costs, guess who ends up holding the bag? If you guessed ‘the average driver,’ you guessed right.

Insurers are doing their best to clamp down on insurance fraud, but it’s an uphill battle thanks to the fact that whiplash, one of the most often claimed injuries, is notoriously hard to disprove. A skilled fraudster will easily be able to tell a doctor what they need to hear in order to diagnose whiplash, and then the criminal is off to the races, oftentimes netting tens of thousands of pounds in compensation.

Initiatives are in the works to curb this behaivour, but few have actually surfaced as of yet. In fact, industry experts say that even those solutions that have been implemented or are to be implemented shortly – such as the referral fee ban and requiring lawyers to take their success fees from the compensation award paid to their clients instead of double dipping from a defeated insurer – may not have much of an actual impact on insurance prices at all!

In other words, signs point to a bit of a rocky ride ahead of us, so make sure you fasten your seat belts and don’t forget to keep looking for the best deals whenever it comes time to renew your insurance cover. Never take the first offer, and for goodness’ sake, don’t just auto-renew this year! You’ll thank me later.

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