Have you ever asked yourself or others why is car insurance so expensive? Let read this article to have 9 most underlying reasons revealed.
Insurance premiums for vehicles now become the profound concern right after a motorist decides to buy a new car or to do something with his or her owned vehicles. So why cannot car insurance be less expensive?
Generally, the amount of money paid for insurance is high because the claim’s cost is high. As a result, insurers increase premiums so that their coffers are maintained. For more info and free body car insurance quotes, check out https://ibaohiem.vn/bao-hiem-than-vo-xe-o-to-bao-hiem-bao-viet/
In specific details, many factors are contributing to the (hiked) price of car insurance that you (like other motorists) must bear.
9 Reasons Making Car Insurance Premiums Expensive
Frauds can be said to be the leading factor of the high costs for car insurance.
You are probably shocked if knowing that weekly in 2016 insurers thwart more than two thousand claims of frauds with a value of £25 million (statistics of ABI (Association of British Insurers). Since the launch of Insurance Fraud Register (IFR) in 2013, the number of cases has been reduced.
2. Whiplash claims
Claims for whiplash injuries (‘crash for cash’) are among the most expensive car insurance claims.
They are just less common than frauds.
There is an estimation of 1.5 thousand whiplash claims in the UK on the daily basis. Because never is easy to diagnose whiplash – whiplashes cannot be seen either on X-rays or scans – how can insurers refuse whiplash claims.
Resulting from the total cost that insurers must pay for these claims is approximately £2 billion a year, every driver must pay around £90 more for annual car insurance premium.
3. Referral fees
In claims for injuries happen to individuals, insurance companies usually sell details to lawyers who work on personal injuries. Compensation claims, therefore, become higher.
To be clear, you can contrast these two types of statistics provided by the UK government: throughout 2006 and 2012, though there was a fall of 20% in reported accidents, the percentage of claims regarding personal injuries still witnessed a rise of 60%.
Referral fees make honest motorists pay more on their car insurance premium
4. Uninsured motorists
At a glance, it seems to be irrelevant between over one million Britain motorists with uninsured vehicles with and the higher car insurance premiums for insured car drivers. However, they cost you as well, for sure.
If someone drives his or her car without any paid premium, some insurance companies out there still have to pay for the cost arising from the accidents that the uninsured drivers have caused. The average annual premium for car insurance that uninsured drivers add to others is about £30.
5. Insurance enforcement
If you are a registered vehicle keeper, you are responsible for making sure it is insured all the time, no matter how you keep it (leaving it in your garage or driving it on the roads). Violating the rule means that you must bear the penalties. For your information, the penalties could be very harsh (i.e., under the Continuous Insurance Enforcement (CIE) of the UK).
With such a high risk that car drivers may pose to the insurers, the insurers may ask them to bear a higher premium price for covering it.
You may have to pay a fixed penalty of £100 and your car may be wheel-clamped if you flouted the rules
6. Insurance policies for young motorists
It may not surprise you that 20% of drivers causes accidents within first year of their driving, and around 25% of total road accidents reports the involvement of a driver in the ages from 17 to 24. Hence, young drivers usually have to pay an insurance premium of 18% more expensive than older motorists.
According to the data of https://www.moneysupermarket.com in December 2017, a young person must pay £1,242 (on the average) for fully-covered insurance policy.
7. Risky occupations
Some jobs (stuntman, for instance) contain more risks than others. As a result, those people are likely to have to pay a higher premium to have their cars insured.
Please remember that motor insurance satisfying standard criteria only covers the items of social use, domestic use, and pleasure. Sometimes, there is an expansion to a commute (on the daily basis) to the transport station or to the working place. So, in case you want to use your car for your work, let reach a consensus with your insurer on a policy applied specially for you to avoid being refused your claims later on.
8. Postcode problems
So far, some geographic areas are at a higher risk of theft or vandalism in comparison to others. Hence, when considering all risk factors, insurers may charge you a high premium if you are living in a downtown area with high crime rates.
Sometimes, you are possibly concerned that there is a decline in the crime rate in your living area, why the annual premium doesn’t decrease. The answer may be like this: your insurer doesn’t timely update their records. It means you are continuing paying higher insurance costs than you should have to pay.
9. Car insurance for group membership
Well, all cars are classified into groups of car insurance. For example, there are 50 groups for car insurance, under the UK specifications. The premium will be higher if your car is in the higher group of car insurance.
Do you know how they decide car insurance groups?
Well, based on several factors, including new car values, damage and parts costs, parts prices, repair times, performance, safety, bumper compatibility, car security.
If you’re buying a car, you should check out which group it belongs to. In the case you have already had a car, please keep in mind that extra cost may be added to your premium corresponding to any modifications you have made to your car. For example, you are likely to have to pay up to 13% of premium if your car has a full body kit.
Which group of car insurance is your car assigned?
Final thoughts: Cutting the cost
Insurance for our cars is undeniably necessary. However, because many factors may cause you to have to pay more, you should develop smart strategies to reduce car insurance cost.
For example, building up no-claims discounts or telematics-insurance policy may be a smart way. Also, you can pay for professional advice and services so that what you have to pay is what you really want to pay.
Within such a short article, we could not provide you more information. However, you can be sure that what you have read through is the most useful information.
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