High premiums on car insurance renewals

Despite not making a claim with your car insurance company in the first year, or however many years you have been a policyholder, a combination of factors has led to some companies increasing their car insurance renewal prices. Following a change in the law by the Government the National Health Service can now reclaim up to £10,000 in treatment costs from the car driver’s insurance company who is at fault after a road traffic accident. Also many UK lawyers are offering a 'no win, no fee' claim services to the public who seek compensation for their injuries following motoring accidents. This has led to a huge increase in personal injury insurance claims.

Another factor causing renewal premiums to rise is the fact that some car insurance companies heavily discount premiums for new customers in order to attract business. This may be good news for the customer in the first year, however, these same discounts will not necessarily be offered to existing customers. The other main factor is the insurance company’s continuous assessment of risk. Depending on the number of claims made, where you live could dramatically influence the cost of car insurance premiums. For example a crime surge in your local area resulting in lots of cars broken into could trigger an immediate reassessment of risk from an insurance company perspective.

There is some good news however, many new car manufacturers are now designing vehicles for quick repair, and therefore the cost of car body repairs should fall over time. Also, some of the bigger insurance companies are either introducing new IT technologies that reduce the paperwork required when making car insurance claims or outsourcing to specialist claims handling agencies in the UK and abroad. This has resulted in the claims handling cost to fall in real terms allowing for inflation.