Do you ever wonder why you pay more for insurance than before? Well, this article reveals how the cost of insurance has changed over the past 20 years. We give you insights on the main types of insurance and why their premiums have risen so much. Keep reading to find out more.
Car insurance: why premiums have risen
Research has revealed that car insurance cost is three times higher than cost 20 years ago. 20 years ago, the average cost of car insurance policy was 327 pounds. The current cost is more than 900 pounds. Why is car insurance much more expensive? It is not a high number of claims that have pushed up the rice because the number of rod accidents has declined.
A good explanation for this would be a sharp increase in personal injury claims. About 90% of the whiplash claims (1500 on average per year) made in the UK are added to the year average premium according to the Association of British Insurers (ABI).
Home insurance: why costs have remained constant
While car insurance costs have sharply increased over the past 2 decades, home insurance costs have remained constant. When compared to the costs of insurance in 1994, the average building insurance has increased by more than 20%. On the other hand, contents insurance costs have reduced by 5%. The ABI, the reason is increased competition between insurance companies. Also, homes have become safer than before, domestic building fires and house burglaries have fairly reduced overtime.
Insurance costs for buildings can also be influenced by changes in weather patterns. During harsh weather winters, premiums are likely to be higher. This is the time when pipes burst and roofs are damaged. Homeowners facing a high risk of flooding are also paying very high premiums.
In the end
Annual premiums for most types of insurance have increased over the past 2 decades. As time goes, premiums increased depending on the increasing risks of losses.
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!
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