Insurance premiums - Tim Hardingham
It seems to me that my insurance premiums increase yearly. It also seems to me that the amount the company would pay out to cover the cost of replacing the car if needed decreases. Shouldn't my premiums therefore decrease in line with that? If I pay (arbitrarily) £500 in year one, and they would pay out (arbitrarily) £8000 if the car is written off, why next year do I pay £550 but they would only pay £6500 (or whatever). By year five or six I'm paying perhaps £800 for £1000 worth of cover!
RE: Insurance premiums - Chris Williams
The point is that your cover covers far more than just replacing your vehicle. It is covering you for third party liability and any medical costs you incur if you are involved in an accident. Injury compensation amounts, repair costs and the amount the insurance companies are expected to pay back to the NHS when there are injuries have all increased massively over the last few years. Most motor insurers are losing money - there are very few left that aren't part of much larger composite insurance companies who can absorb the losses.
RE: Insurance premiums - Tim Hardingham
Sure, but if the cost of covering me for third party liability or medical stuff goes up, then that is offset by the cost to the insurance company of replacing my car, so the premium should stay stable? I understand that the actual figures might not balance, but the principle is the point. Does in fact the car valuation have any effect on the premium at all? If I 'close' my insurance and reapply immediately with a lower valuation, will my premium drop? It seems you are asked the cost of your car at the start of the policy, but never again at renewal.
RE: Insurance premiums - John Slaughter
I think Chris Williams is right. the big issue with insurance are the third party claims - you can cause the same havoc and injury with a banger as you can with an expensive car. Compared to a major injury claim the car value is not so significant. In many cases the third party insurance cost is very little lower that fully comp.

Despite the downsides of swapping companies, it pays to shop around, and this years cheapest broker isn't necessarily next years cheapest broker. This year I saved £70 for a few phone calls, and the cheapest deal was with CGNU, not exactly a small company.


John Slaughter
RE: Insurance premiums - Roger Jones
Just to report that my insurance premiums on one of my cars have actually gone down year on year -- only because I shop around thoroughly every time. For what it's worth, the cheapest source last year was Kwik-Fit, but they quoted a 46% increase this year, which turns out to be related to their new owners, Ford, wishing to favour their own vehicles. So, this time round I found Norwich Direct to be the best buy. The range of quotes for covering my 4-year-old Golf VR6 Highline was from £414 to £750, with one source demanding a £600 excess (just £100 on the Norwich Direct policy).

Value my car