CAR INSURANCE NEWS ROUNDUP: 7 DAYS ENDING 9 JULY 2014:
Once more car insurance rates have trended downwards, but experts are unsure of how long this dip will last – if at all.
Unless you’ve been living under a rock for the past few years, you’ve probably noticed that the motor car insurance industry is one of the most volatile out there. The price of an average year’s worth of cover fluctuates wildly, and the latest development – a 15 per cent drop year on year – might seem like a fantastic bit of news, but there’s no telling how long it will last.
The new figures, which were compiled by a major car insurance comparison site, found that the average quoted premium of £579, is the lowest of its kind in five years. That’s all well and good but the truth of the matter is that if car insurance companies don’t collect more money in premiums that they shell out in claims, the price they charge to their customers goes up. Most industry experts are predicting that the pendulum is going to swing back the other way over the next 12 months, so enjoy this whilst you can.
Of course if you’re tired of your traditional insurance experience you can always try one of the new kids on the block. Telematics is a popular choice, but there’s another alternative drawing attention this week: it’s called peer-to-peer insurance, and while it sounds like you would match individual investors with those in need of insurance it works more like a mutual: one high-profile P2P insurer known as Guevara works by pooling the insurance payments of all their customers together, and then uses any cash not spent in providing claims specifically to reduce premiums for their customers the next year. It’s becoming a popular choice for many Brits who are tired of watching their premium pricing scale higher every year.
Is it going to solve all your problems? Probably not. If you end up in a P2P insurance arrangements with a collection of pillocks who end up getting into car crash after car crash, you can kiss that discount car insurance good-bye. Then again, is it going to be worse than what you’re paying now?