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Motor Insurance Is Crippling UK Drivers

By Paul Michael
3rd September, 2011

 

 

For many people, owning a car or motor cycle is not high on their agenda because they may have access to good public transport systems. However, for millions, public transport systems are simply not good enough or are non-existent in many areas of our country. For these people a car or motor cycle is an absolute must to enable them to seek and maintain employment and for basic living requirements.

Young people are disadvantaged from the time they learn to drive. Insurances are hiked to around 300% of an older person’s typical insurance premium in order to add a learner driver to the policy. Insurers will tell you that it is due to the risk of the learner having an accident. This of course is nonsense because that same risk was inherent only 10 years ago, but policies were increased insignificantly back then by comparison. When my daughter was learning to drive my policy was increased by about £50. Today for my son I cannot get a quote below £850 for a 1300cc Fiesta – over £600 on top of my current premium.

Once young people learn to drive a car and then arrange insurance, they will be quoted at least £1,000. Some young drivers I know are paying £1,500 and some over £2,000. This in itself is ambiguous. How can one person be charged £500 to £1,000 more than another when typical premiums for older drivers are around £300?

These charges make it near impossible for many young people to own or even borrow a car. They are being victimised before they have even sat behind the wheel of a car. They are young, therefore, they are dangerous. It’s nonsense; many young people are good drivers and never have an accident. In the workplace we are not allowed to discriminate the old and young. Why? Because we all learn in different ways and speeds. So one young driver could become as good as experienced drivers in less time than another young driver. However, experience can be compensated by driving more carefully, which most young and older folk do anyhow.

Our streets are not riddled with young driver accidents. I haven’t been involved in an accident caused by a young driver and I don’t think I have ever seen an L plate driver in an accident. 

Even seasoned drivers get ripped off by insurers. After a year of accident free motoring drivers earn one year of ‘No Claims Bonus’, and this increases year-on-year. So what is this bonus? While many people would take it as obvious, perhaps looking under the bonnet on this scam would be worthwhile.

Most drivers get sent a schedule each year just before their insurance expires. Most people’s insurance premiums go up, which for many is the kick they need to ‘Go Compare’, or similar. But why do premiums go up if you have earned yet another year of No Claims Bonus? Surely premiums should reduce. Every time I have gone looking elsewhere for insurance I seem to make a good saving - £85 for this year. 

So, No Claims Bonus is not much of a bonus at all, unless you look elsewhere for quotes. Then you can see quotes rising and falling as you adjust the years of No Claims Bonus. However, insurance providers have wrapped this up to associate the Bonus with the vehicle you are insuring rather than the insured driver. If, for example, you want to insure two cars, even though it is possible to drive only one car at a time, the Bonus can’t be put on both vehicles.

What happens if you are involved in an accident and it’s not your fault? Well, yes it is your fault. That’s how you are treated by the insurance company. So you have to cough up the excess fees (yes there are two: voluntary and compulsory excess). You have to get your vehicle to the appointed garage. You might get your vehicle recovered if you can’t drive it, but you may have to pay. You might be provided with a courtesy car, but you might later have to pay for it.  I could carry on here but if you have been involved in an accident you will know that your world is turned upside down, you are completely inconvenienced and you will be severely out of pocket while you fight your corner and your insurer doesn’t seem to give a damn. 

When you try to buy insurance there is now a myriad of clauses and add-ons that, frankly, the average person would be completely bewildered by. To add to the compulsory and voluntary excess fees, there is No Claim Bonus protection, Legal protection, courtesy car, etc. and there are additional fees if you pay by direct debit. So, ‘Fully Comprehensive’ insurance is no longer fully comprehensive. If it were it would fully include all of these add-ons. Once the insurance is bought, you then might find that one company deals with your policy differently from other insurers. My new insurer has asked my to provide proof of my No Claims Bonus. My last insurer didn’t ask for this.

On top of all this, have you noticed that a minor speeding conviction lasts for 3 years on your driving licence, but insurance companies extend that out to 5 years?

 

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Given that motor insurance is a legal requirement, the UK government must get it under control to provide a much fairer system. An MoT test has its charge set by the government, yet garages can compete for our business and many will provide additional peripheral services. Insurance companies should be made to do the same – a set rate for the basic legal requirement with charges being made for additional cover and other services. If your car is not worth much then you might stick with the basic legal requirement. If you own a Ferrari, well you might want some additional cover. In any case you will know exactly what is included in the basic offering and any add-ons. No more ambiguity.

The basic legal requirement in insurance should not be different for males or females; older or younger people; experienced or not so experienced drivers. It should take everyone at face value. However, if you cause an accident or you have motoring convictions, then there should be a sliding scale method of increasing the basic legal requirement fee to align with the seriousness of the crime. So, for a minor speeding offence, the fee may get 10% added on. If someone causes an accident through careless driving then they may see an increase of 90%. Drivers can still be banned for drink driving or manslaughter offences and their future basic legal fee should reflect the seriousness of the offence with increases at maybe 200% or more. All these increases will be removed over an appropriate timescale. 

This is a much fairer system to provide a legal motoring requirement. Everyone would be treated equally with no pre-empted yet unproven risk theories.  

And let’s not forget. How many insurance companies have been lost in the recession and economic downturn? 

Sign up to this ePetition to get it debated in the House of Commons

 

 

 

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