Car Insurance Increases – How can you beat them?.

Car Insurance Continues To Rise.

2023 is seeing unprecedented increases in insurance premiums, with car insurance seeing huge increases for everyone.

Consumer Intelligence has stated car insurance prices are up 48% based on quotes from Confused.com, GoCompare, Compare the Market and MoneySuperMarket. Confused.com is quoted by the BBC saying premiums are rising by over 40%. The Office for National Statistics says 43%, Direct Line customers are quoting 50-75% increases, and some Admiral customers are seeing increases of over 60%.

Whilst insurance premiums are notoriously cyclical, such significant increases create real stress for car owners and seem unjustifiable when headline inflation is 6.7% in the year to August.

Why Has Car Insurance Gone Up?

One obvious factor is the higher vehicle repair and courtesy car costs. For insurers, these are estimated to have increased by 30-33%. However, these costs make up only a modest percentage of the premiums charged. So, there must be more going on.

Large insurers and comparison sites continue to make reasonable profits. However, Direct Line and GoCompare have recently announced falling revenues or rapidly reducing margins, so it hardly looks like they are profiteering at our expense.

With the ongoing cost-of-living crisis, we’ve seen insurance fraud rapidly increase. Motor insurance fraud was the most common type of opportunistic fraud referred to by the City of London Police’s Insurance Fraud Enforcement Department between March 2022 and April 2023. The answer may, however, be elsewhere.

Rumours are surfacing that big premium increases reflect a slow response from online insurers to the theft epidemic. Vehicles which seem to be the most common victims include Land Rovers, Range Rovers, Bentleys and, more recently, Ferrari thefts. It’s believed that online insurers continued to insure these vehicles for 1-2 years, even after the high level of thefts became apparent. Being slow to react to real-time events meant these companies may have accumulated major losses they are now seeking to recoup from car owners in general.

The Impact on Luxury Car and Supercar Owners.

Whilst premium increases impact all car owners, owners of more expensive cars such as Porsche, Aston Martin, Rolls Royce, Ferrari and Lamborghini are particularly impacted as their premiums are higher. Annual increases from online insurers can range from £500 to several £1000s for these models.

The surge in theft claims for Range Rovers and other prestige vehicles results in drivers experiencing premium increases. It’s likely that elite and expensive cars will bear the brunt of price hikes. However, this approach leads to responsible owners being charged higher premiums to rectify the mistakes of online insurers. It also fails to accurately differentiate between those owners who take security seriously, drive carefully and have secure parking locations versus others who park on the street and may not even activate all security devices, such as immobilisers and trackers.

The good news is that luxury car and supercar owners can control their insurance costs by taking specialist advice and not just accepting renewal quotes from online insurers. As a specialist broker, Elevate has typically kept premium increases well below the increases associated with online insurers.