CAR INSURANCE NEWS ROUNDUP: 7 DAYS ENDING 20 AUG 2014:
So here’s the good news/bad news moment of the week: the so-called “real” cost of insurance fell recently, but it’s going to be quite short-lived indeed.
The British Insurance Brokers’ Association came forward with the good news this week, declaring that motor car insurance premiums had dropped by 5.6 per cent. Even better was when inflation was taken into account the “real” cost of car insurance was closer to 7 per cent instead – and Biba said that was closer to the kinds of levels we say some 4 years ago.
This of course triggered much rejoicing in the world of car insurance brokers and customers alike. Credit for the new lowered rates was given to the Government for taking steps to reduce costs for insurers.
Meanwhile, speaking of insurers: one of the largest car insurance companies in the UK – Admiral – took it upon itself to ruin everyone’s good fun by declaring that even with all the work the Government put in to making things better the downward spiral of insurance premiums is all too easily halted. Now to its credit, Admiral didn’t actually come out and say exactly how this could happen; in a way it sounded more like an empty threat than anything else, as if the insurer was some sort of evil many-tentacled secret society that would pass as an antagonist in the next James Bond film.
No, I’m not accusing Admiral of some vast conspiracy to increase revenue by engineering an insurance price hike by this time next year. I think Admiral is just responding to market pressures, especially considering that the industry most likely can’t sustain such low premium prices because revenues are indeed slipping. If prices need to come up in order to slip out of the red and into the black the industry will attempt to do so, and that will mean the lovely, affordable insurance premium you have now is likely to increase by renewal time.
So in other words? Renew now, get that low rate whilst you can! It’s likely not going to last when insurance executives find out that they can’t keep paying for their Maseratis and Jaguars without raising rates on all of us!