Because of a variety of contributing factors.
This is a question that many petrol heads ask themselves every year, and hopefully our Milton Keynes car servicing team can provide you with a few answers.
Who knows? We may even be able to offer a little advice for saving some much needed ££’s when it comes down to your car insurance renewals.
Do I Really Need Car Insurance?
To make it short and sweet – yes.
If you are a car owner, it is a legal requirement. Failing to provide valid insurance can lead to driving penalties, criminal charges and even time inside.
Unfortunately, many car insurance companies deal with false claims year after year. These claims are usually filed by those with fake (fraudulent) insurance, which leads to a rise in insurance premiums.
What Makes Car Insurance So Expensive?
If we went through every single potential reason behind rising insurance fees, then this article would cover at least 6 or 7 pages. However, we are going to discuss what we believe are the most common reasons behind higher premiums.
Many people who purchase a new vehicle assume that the policyholders age impacts the price that they are presented with and that assessment would be true.
To insurance companies, new and inexperienced drivers are considered a higher risk and therefore, result in higher premiums should a claim need to be made. Whereas, someone with more experience behind the wheel and with a no claims bonus could see his or her premiums halved in price.
It would be foolish to assume that age is the sole reason that costs continue to rise. Many of the reasons behind larger insurance fees are related to fraud and untrue claims.
High Risk Areas
I can speak from experience here, as it has happened to me on more than one occasion. I used to live in a small market town on the outskirts on Milton Keynes called Olney.
For one reason or another, we ended up moving back towards Central Milton Keynes, and purchased a new home in Wolverton. Unfortunately, to my insurance provider at the time, my new area was considered a greater risk, thus increasing my premium by approximately £65.
My advice? Look into the areas crime rates and get a quotation from an insurance provider before you commit. Of course, sometimes this cannot be helped but try to take action when possible.
Car Insurance Groups
Every vehicle that is registered in the UK is put into a vehicle classification. Traditionally, the higher the number of the insurance group – the higher the costs are to insure the car. Insurance groups are traditionally numbered from one to fifty.
These groups are decided based on the estimated costs of repairs. Insurance groups and companies that provide car repairs in Milton Keynes will consider the costs of parts, their availability, the labour required and even the costs of building the vehicle.
For example, the costs involved to replace a rear bumper on a Ford KA will be considerably cheaper than the costs involved to replace a bumper on a Ferrari California.
Different Careers and Occupations
Your chosen career can also impact your insurance premiums. As with any insurance company, you will always be asked to declare your profession. It is extremely important to be as accurate as possible, remembering to state whether your use of the vehicle on the policy if for social, domestic and commuting or simply commuting.
Failing to inform your insurer of your profession and car usage could lead to a claim being withdrawn and you may not necessarily get a pay-out should an accident occur.
The profession that you declare has a large impact too. For example, a stuntman or someone that is considered a higher risk behind the wheel is going to be charged more than an accountant or estate agent.
Over the last couple of years we have started to carry out more and more car recovery in Milton Keynes as a result of uninsured incidents. A rough figure estimates that for every uninsured driver on the road, we pay an additional £30.
Each one of these drivers contribute to 23,000 injuries and more than 150 fatal incidents every year.
Incredibly, according to a figure on the Money Supermarket website, there has been more than 2,670 false claims discovered that cost a predicted £19million every week.
As a result of these false claims, our insurance premiums continue to rise. The introduction of the insurance fraud register is in place to help police and insurance companies identify and charge these “fraudsters”.
Home insurance and theft claims are the most common but car insurance claims are now becoming more frequent.
There are many reasons for insurance companies charging higher fees year after year. Hopefully, a few of the points that we have discussed in this article will help you to understand how and why these companies operate as they do.
Despite there being many causes of higher premiums, there are a few things that you can do to reduce your insurance costs.
Younger, newer drivers can consider purchasing vehicles that are in lower insurance groups. Additionally, they can consider telematics insurance, which involves a small back box being fitted to your vehicle.
The driver’s ability is then regularly recorded and data is taken from it to measure how you drive. Based on this information, insurers are then able to act and potentially reduce your premiums.
Having at least 12 months no claims will significantly reduce your insurance costs. Even after just one year without a claim could save you a few hundred pounds. However, on the other end of the spectrum, just one claim could be all it takes to significantly increase your costs.
Whenever you are driving, ensure that you take your time and do not rush. Putting yourself or others into danger could be what results in a claim against you and more expensive annual insurance premiums.
Also, it’s worth considering the age of the vehicle you purchase. Older cars are more suspect to damages and longer repairs – seeing it as a greater risk.