So Is Insurance Becoming More Expensive
With many press releases that car insurance becoming more expensive for various reasons we wonder if this is a reality or not. There are good reasons why financial organisations may want to put up their insurance premiums, not least is the economical climate, with many insurance companies effectively a bank being financed by the government, either here in the UK or across the pond in the states.
These banks need to get profits (or losses down) to ensure they get back on their own steam not the government’s or tax payers. A good reason to add a little to all insurance premiums to speed up the process.
The current rise in used car prices and the decline in the new car parts market may also play a part. After any accident, these cars need repairing and if it costs more to put these back on the road, then it should cost more for the insurance premium. Some good news is when a car is not deemed cost effective to repair and finds its way to an auto salvage auction and then it is possible the insurance company could get a bigger return than from 6 months ago.
Then there is reports of a huge rise in false insurance claims and those affected by the credit crunch are chancing their arm to get some money into their accounts. Certainly in the UK, insurance claims have risen dramatically and so a need to investigate every claim has now become harder.
If you believe the adverts on TV, there is still the ever promise of delivering cheaper car insurance, you would think it was a cheap as ever. Certainly in my case, my premiums have only risen because I now drive a faster car. So maybe any rise is just in proportion to all other prices (excluding home prices) and it is only scare mongering or the need to deliver a news story. In this current climate i am not sure anyone really knows where we are going with anything financial.