CAR INSURANCE NEWS ROUNDUP: 7 DAYS ENDING 10 SEPT 2014:
Major car insurance companies in the UK are indicating that your premium prices are likely to rise soon – but who’s exactly to blame for the incoming rate hike?
Everyone loves to blame insurers when it comes to ridiculous price gouging on motor car insurance, claiming that it’s just a ploy to line the pockets of these firms with our hard-earned cash. Insurers shoot back that it’s not them but it’s in fact fraud activity that causes rate hikes, yet why have car insurance rates been falling so much recently – and why are they supposedly going to go back up?
Well it turns out it’s not one person or entity’s fault. In fact it can be traced back to a few distinct problems. One is actually set squarely on the shoulders of the insurance industry though, and that’s the fact that the price war over the last few years resulted in actually too much competition, driving prices down much too far to the point where they were unsustainable.
Or at least that’s what Admiral says. The car insurance giant says it’s likely going to raise its rates over the next few months in order to cover its operating costs. Insurers have been so keen to grow market share – Admiral included – that little thought has been spent on the consequences of this. As a result, we’re all likely to see our rates begin to creep upwards.
Of course it’s not just insurers that get all the blame here. In fact it turns out that for some insurance providers the amount they have to pay out on claims is a serious source of their costs. Large scale provider Aviva, for instance, just released information that almost three quarters of their premium revenue collected from Brits like you and me ends up flowing back out of their coffers as claims. Aviva didn’t specify how much of this claims activity it thinks is fraudulent, but I’m betting it wouldn’t mind a few fewer instances of claims fraud to get their books back in the black.
So there you have it: it’s not just the insurance industry’s fault, it’s all those execrable, awful drivers out there that cause road traffic accidents. Now you know who to blame. Enjoy your new high rates.