If you ever feel like you are paying more for your car and home insurance you are not the only one. Studies show how the cost of the main types of insurance has changed over the last 20 years. The study shows that since the year 1994, the cost of motor or car insurance has almost multiplied four times while the cost of home insurance has remained comparatively static.
Why has the premium for car insurance increased so drastically?
The AA initially started tracking the quarterly premiums paid on new insurance policies in the UK in the year 1994, on further evaluation of the cost of motor insurance over the year to today, it has been revealed that the cost of motor insurance has since almost tripled as to what it was in the year 1994. Comparatively, the cost of home insurance has more or less remained the same- although the cost of buildings insurance has seen some change since the year 2008.
According to figures collected by the government, there has been a 40% decline in the number of road accidents whereas the number of motor vehicles on the road has increased by a 10 million figure, concluding that it cannot be a rise in the number of insurance claims fueling the rise in the cost of cover. A likely explanation was obtained when a spike in personal injury claim was seen which could have an intern caused the cost of insurance to be pushed.
The years between 2006 and 2011 alone saw the average cost of motor insurance being doubled and leading insurers determined the major cause to be the rise in personal injury claims particularly from the whiplash.
However, since the year 2012, a gradual fall has been observed due to government intervention.
Why did the cost of home insurance remain unchanged (for the most part)?
The agents at the ABI believe that this could be because of the increased competition between insurance companies for more customers. Additionally, they argue that homes have become relatively safer and there has been a decline in incidents like domestic building fires, domestic burglaries etc. Besides, government bodies have made funds and relief available for citizens whose homes have been affected due to natural causes, like bad weather, reducing the premium rates of home insurance.
We would recommend you to talk to one of our advisers for life insurance quotes.
Any quote that your adviser provides you with will take into account your circumstances, your medical history, as well as your budget!
Call 011-3733-4610 – Monday to Thursday from 11.00 to 19.00 and on Friday between 11.00 and 16.00