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Car Insurance in the UK - it's modern-speak for 'kerayzee!'

When I first drove, I had a car that I bought for £1,300. I insured it at my parents home in a sleepy little village, parked on the driveway, and one years insurance cost £1,100. Yes - one year of insurance cost almost the same as buying the car in the first place. Surely though, by now, five years of accident-free experience later, the story would be different?

Iv’e just renewed my car insurance. I’m 25, have five years no-claims discount, and drive a car that’s worth about £500 which has an immobiliser fitted. My policy is Third Party Fire and Theft, meaning were I to crash I would receive not a penny. I drive 12,000 miles a year, mostly to and from work, with trips to see my family included. The cost of my renewal for one year? £455.

When one years insurance is consistently the same price as the car being driven, is it any wonder that 30% of all young drivers have driven a car without having insurance? See this from a young drivers perspective - do you throw away the same amount of money your car is worth ‘on the off chance’ that you have an accident, or do you drive for a year and use that extra money to buy a better car?

I’m not advocating driving without insurance, I think it’s immoral as well as illegal, but when seen like that - isn’t it obvious why the statistics are what they are? It’s claimed that policy prices simply reflect the cost to the insurers, but if that is the case, why is it so? Why do insurance rate rise by 10%-15% each year - well in excess of inflation?

The excuse is that Britain is becoming litigation happy, like America - and I believe it. I also think it’s damned unfair on everyone, and I’d be happy to see the claims people can make being lowered to something a little more sensible, or the claims needing to be somewhat more convincing before they are granted. It would be better for everyone. Think about it - constantly higher prices year on year mean less people bother getting insurance. That means if you get hit by a car, the further into the future that is, the more likely that you’ll get hit by someone with no insurance (and thus won’t be able to claim a penny from them). That’s not good for anyone. So, someone needs to find a way to get insurance premiums back down to a sensible level, and enforce insurance more strongly. The system as it stands is not stable, and will eventually break down as fewer and fewer people can afford it. That means either less people will be able to drive (and frankly our public transport service could not cope with any reasonable upward shift in use) or a higer and higher percentage will drive without insurance. Either option will be extremely bad for the country.


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  1. Dawson posted 1hrs, 2min, 11sec after the entry and said:

    Completely agree with the "have you had an accident in the last 5 years" obsession that has gripped this country. I really don't understand how people can see this as "free" money… they claim whiplash in a little crash and then are hopping mad to find that insurance premiums are on the rise! I've also noticed companies offering insurance that even covers you when you're hit by an uninsured driver, what a crazy state of affairs!

    Oh, and just to make you feel bad, just been quoted £443 fully comp on a 2.5l Triumph saloon smiley icon: laugh Classics Rule. FACT.

  2. sam jones posted 18hrs, 2min, 42sec after the entry and said:

    Hi Matt,

    I pay a few hundred quid on a several thousand pound car fully comp with no claims protected and have always paid not very much. Have 2 words for you - sex change!

  3. MWF posted 2 days, 17hrs, 37mins after the entry and said:

    There's been a few developments in the past 10 years that have really affected insurance costs. The most notable being the types of car younger drivers own and legislation on repair work. Cars have become more complex and engineered to last a relatively short time, while they are safer they suffer more structural damage in a crash and even minor incidents can result in a written off car. On top of this we are in a boom period and borrowing is cheap, thus many young people are buying cars on finance.

    Then we get this issue of people driving with no insurance, that simply pushes the costs onto the insured drivers and we get this circle of prices going up and people driving ilegally. It doesn't help that the fine you get for no insurance is lower than most of these people would be paying if they had insurance.

    The good thing is the police can now dip into the central car insurance database and soon cameras will be linked into this too which will eventually mean driving an uninsured car will be relatively difficult.

  4. Matt Wilcox posted 3 days, 20hrs, 29mins after the entry and said:

    All excellent points Chris, well said.

    Though I'm not a fan of the fact the my MOT certificate is no longer considered proof of my MOT. Only the on-line database is proof - that doesn't sit well with me.

  5. Matt Wilcox posted 5 days, 1hrs, 43mins after the entry and said:

    Sam - don't get me started on sexism in the insurance industry. If it were any other industry they'd be dragged through the courts and beaten to within an inch of their corporate life. And rightly so.

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