Why you should expect more for your premium rises!
We’re all very aware of how much more things now cost. Let’s take the bull by the horns: that includes your insurance. Let’s run through the worst of it first, and then we’ll give you the tools you need to make your money work harder for you.
Average car insurance premiums have risen by up to 48% in the twelve months up to June 2023. That’s four times more than experts predicted. Not only is this an incredible increase, but it’s also the price shock you receive when you don’t think about something for a year. Suddenly, there it is, double the price, with little explanation as to why.
While home insurance has increased by ‘only’ 6% to 9% over the past 12 months, it is still another increasing cost lumped onto households, in addition to all the other costs.
Interestingly, it’s the millennials and older drivers, and drivers in Scotland or London, who have been hit the hardest. Car insurance now counts as one of the most expensive household bills in the UK.
So, how did we get here?
Consumer Intelligence recently published their findings on the matter.
Rising energy bills means higher overheads for businesses, and of course that is passed to the consumer.
The cost-of-living crisis has seen an enormous number of fraud claims, pushing up the price for law-abiding citizens.
Replacement and repair costs have increased. For example, courtesy car costs have increased by 30%, while paint costs have increased by 33%.
Insurers are now adjusting prices to recoup losses against inflation, for example, where they hadn’t anticipated a repair coming in at a more inflated cost due to the crisis.
The ‘loyalty penalty’ was banned from the end of 2022, so insurers cannot charge existing customers more than new ones, removing a significant element of competition and increasing costs for everyone.
The findings also indicate that the growing number of electric vehicles could be contributing to car premiums rising, as replacement parts are far more expensive when compared to a standard motor vehicle.
While the FCA ‘continues to monitor the market’, there is still plenty you can do to get better value for your hard-earned money. Yes, we want all Howden clients to be savvy spenders.
Every client is a VIP
In an environment where costs will remain high, let’s change the thinking to ‘pay more, expect more’.
The usual cost-cutting advice would always be to shop around, but with prices rising across the board and the time it takes to obtain numerous quotes with big variations on cover and small print, that can add a new layer of hassle to the increasing frustration of not actually finding better deals.
But what if you had someone to do all that for you, and for no extra cost. Something along the lines of a personal insurance shopping service to do the heavy lifting for you. Sounds great, doesn’t it?
The point is, if you are paying the ‘extra’, now is a time to ensure you get ‘extra’ in return. For no extra cost (yes, we will say that again), using a broker like Howden could offer you greater value, make you feel more valued, with a friendly face in branch to talk to when you need us, and even provide you and your family with support in the event of a catastrophe or claim. You just wouldn’t get this if you signed up directly with an insurer. So why would you pay more, or the same, for less?
How many insurers or brokers do you know who would contact their clients following the fire at Luton Airport, just to make sure your car wasn’t damaged, and support your claim? Or hear the news of local household gas explosion nearby and be at the scene to support a client before they had even filed a claim, complete with cash to help them manage costs while the claim was dealt with. But it’s not just the big gestures that count, it’s the smaller things too. Like having a branch we’ll-placed in your local community to be on hand, whether in person on over the phone, and we’ll take care of it all for you.
Think about it like this: just like how you’d probably take a look at a restaurant’s reviews before booking, you can do this with insurance brokers, and direct insurers, too. You could well benefit from Howden’s 4.8/5 ‘Excellent’ review, as opposed to a competitor achieving the 3.8/5 industry standard.
It sounds like it’s about us, but it’s all about you – you get better value of service, and that is something we at Howden pride ourselves on.
What you get for your premium
While insurance has clearly gone up, it’s important to take some solace in what a premium does cover you for. We know it won’t lower your premium, but it may make you feel a little better knowing that you are protecting yourself against a sudden crisis.
The UK average home insurance policy of £315 a year could save you many hundreds of thousands of pounds if your home is destroyed. Can you imagine also losing all of the items you’ve worked so hard to purchase over the years? Your family (and pets) will be taken care of while we sort out the claim in the background.
The UK average car insurance policy of £657 could also save you hundreds of thousands of pounds if you damage your vehicle and someone else’s, and injure yourself and someone else. Your policy will also get you back on the road again to ensure you can get to and from work while we arrange your repair on your behalf.
While it’s not all good news in terms of pricing, by reframing what you expect from your policy in terms of better service, you can get far more bang for your buck.
If you would like to talk to us about your existing or new home or car insurance policies, your local branch would be delighted to advise and support. It’s what we’re here for. Search Howden Insurance, give your local team a call or simply pop into your local branch for a chat.
Source: Consumer Intelligence, Which?
