Whilst we were frantically getting ready for 2016; creating To-Do lists and budgeting our finances for the year ahead, the world was forced to tick ‘Insurance Cover’ off the ‘To-Do’ list. Despite the dread of such a mundane task, there were some early risers that managed to escape part of the Insurance Premiums Increase.
For the last two years up until October 2015, premiums were down by over 20%. Insurance is always cyclical and up until the autumn of 2015, we experienced one of the longest periods of cheap insurance as insurance companies were competing against one another to acquire more business.
Warning: this is where it can get complicated…
Insurance companies as you are already aware, are required to pay for their customers claims especially large personal injury claims. These take many years to be settled and insurers are now paying these huge injury payments for past claims where they didn’t charge the correct premiums.
In fact according to the latest insurer accounting results published by Towers Watson, 9 out of the 10 main car insurers made a loss in 2014 with further losses predicted in 2015. This was consequentially deemed insufficient to cover these costs.
According to Google Analytics, the vast majority of us waited until the last minute to compare NI and renew our insurance policies in January 2016. By that stage it was too late. Once the two cars, the dog and the medical insurance was covered, our pockets felt a little lighter than they did the previous year.
“Why?” you ask.
Well there are Three Reasons Why Insurance Premiums Are Going Up:
1. It’s Out Your Control
There are things which occur on a daily basis, that are out of anyone’s control. These factors can have an impact on your Car Insurance Premium. Whether that be rain, sleet or snow. For instance, the Bad weather conditions taking England by storm has resulted in a whirlwind of billions of pounds spent on insurance claim payouts. This will as a result push up the price of all insurance and not just home insurance.
Government Regulations also bunk up insurance premiums. You may have witnessed a surge of Insurance articles appear in both local and national newspapers across the province, in October last year. This was because Insurance Premium Tax (IPT) – the tax paid each time an insurance policy is purchased in UK had increased from 1st November 2015. It rose from 6% to 9.5%. Despite, this being only the 4th increase since 1994; it affected millions of car, household, pet and medical policies.
Also increased usage of cars due to cheaper fuel costs and a general improvement in the economy, equaled to more miles being travelled, more accidents, more claims and increased insurance premiums to pay for these claims.
2. The Good Old Days
Well that’s debateable…When calculating insurance premiums, Abbey Insurance Brokers take into consideration the type of policy, previous claims, the type of claims and how long you have been with Abbey Insurance in order to configure the best price for you.
3. What’s the Score?
Everyone has an ‘Insurance Score’ which determines how safe or risky you are to cover. Whilst most insurance companies will offer you their own deal, Abbey Insurance Brokers search and compare NI with over 15 insurers to give you the BEST Insurance quote; saving you time, hassle and also a bit of cash.
So there we have it, in a nutshell; the three reasons why insurance premiums are increasing.
These increases are right across the industry but thankfully Abbey Insurance NI are not seeing annual increases as high as some of our competitors. E.g. Other insurers have a 20% yearly average increase in NI car premiums.
We hope this has helped you understand the increase in insurance premiums, but if in doubt Abbey Insurance are never too far away. We have over 15 branches across the province, so if you wish to discuss your Insurance Policies further, be it car, van, taxi or motorbike, just drop into your local branch or simply get in touch.