Car Insurance News Articles

Aviva, arguably Britain's biggest insurer, has warned that premiums look certain to rise in the next year. The announcement is a poorly-timed from a public relations standpoint as the group has just announced its profits are up 21%.

In the first six months of 2010, the company, which owns both the RAC and the former Norwich Union, made post-tax profits of £1.2 billion. It said long-term products such as life insurance were performing particularly well.

While premiums are already on the up, rising 7% overall compared with the second half of 2009, and motor insurance rises in double figures, the Full Story

Car insurance premiums will likely rise following tax increases in this year's budget, but the impact will be lower than expected.

Chancellor George Osbourne announced that the insurance premium tax on general insurance such as car and home cover will rise from 5% to 6%. It had been feared the rise could be to 10%, or that it would rise even further and be aligned with the standard rate on Value Added Tax.

Tax on some other forms of insurance, most notably travel insurance and extended warranties, will rise from 17.5% to 20%, mirroring the general rise in VAT. The changes take effect from 4 January 2011.

Insurers reacting to the news generally expressed relief that the rises were not as steep as some had expected, but still argued it was wrong to increase Full Story

Two separate studies show car insurance fronting is still a widespread practice, though it's disputable whether offenders know they are breaking the rules.

Fronting involves falsely claiming to be the main driver of a vehicle in order to lower premiums for the person then listed as an additional driver. It's most commonly associated with parents fronting for a child who would otherwise pay high premiums as a young and inexperienced driver.

The Motor Insurer's Bureau and Aviva found that 70% of those questioned did not understand the term. Of those who then said they had carried out fronting, just 20% said they had done so Full Story

An insurance loophole means drivers could wind up in court after being given a courtesy car when their own vehicle is being repaired.

The situation involves cases where the driver is not liable for the accident which damaged their own vehicle. It appears that in some cases, the courtesy car is provided by an independent firm and by taking the car, the customer is effectively making a rental agreement.

The firm will then try to recover the cost of the rental from the insurer of the person who caused the crash. If they are unable to do so, they may hold the original driver liable for the cost of the rental and pursue legal action to recover this money. It's alleged that some motor insurers place undue pressure on drivers to accept courtesy cars on such a basis, and Full Story

The BBC has exposed a car insurance scam run by a UK claims handling company. It alleges that Midlands-based Speed Claims has deliberately staged crashes to get money from innocent drivers.

The company, which theoretically exists to help accident victims claim compensation (ultimately paid by insurers), is said to have paid an undercover BBC reporter £500 to allow their car to be used in a staged crash and then take responsibility. The resulting claim covered for damage to the other vehicle and for compensation for whiplash injuries to both the driver and passenger.

The reporter had used a dummy insurance policy as part of the investigation, meaning the claim wasn't paid. Had it gone through, it could have totalled more than £20,000.

The man Full Story

Yet another source has predicted steep rises in motor insurance premiums this year. Admiral says its own hikes of 12% in 2009 look set to be followed by similar increases across 2010.

According to the firm, the increases are needed to go further towards offsetting the pressures caused by settling compensation claims. Commenting on the story, a spokesman for the Association of British Insurers said premiums across the industry were around 10% higher than they would otherwise be thanks to the effects of claims. This is above and beyond the effects of uninsured drivers and insurance fraud, both of which are also cited as reasons for higher premiums.

The Admiral announcement may not go down too Full Story

Marks & Spencer has come up with a creative way of enticing new car insurance customers: it's offering a year's worth of free car washes for all new customers.

Until the end of February, anyone taking out a new M&S motor insurance policy through Moneysupermarket.com will receive a voucher book for 12 free washes at any ARC IMO location, a deal worth £84 a year.

The deal was announced in the same week as Kwik-Fit offered a special 24 hour "sale" during which every insurance policy came with a free MOT.

Such offers reflect the way price comparison sites and market competition Full Story

The average cost of car insurance in the United Kingdom has topped £1,000 for the first time. The AA says the steep rise is partly down to an increase in the number of settlements in personal injury cases.

Year-on-year, the average fully comprehensive quote rose 18.7%, the biggest annual leap since the AA began keeping records in 1994. That includes a 7.2% rise in the past three months alone, fuelled by an increase in accidents caused by the bad weather.

AA car insurance director Simon Douglas said the yearly rise was exacerbated by two factors. Firstly, there has been an increase in legal claims for injuries such as whiplash which people were less likely to follow-up in the past. Secondly, insurance fraud is still a problem, adding around £44 to the average Full Story

The Association of British Insurers (ABI) has reported a 30% increase in fraudulent insurance claims detected and prevented since 2007.

Whilst more people are being caught submitting fraudulent claims, the estimated cost of undetected fraud claims has also risen by 24% to £1.9 billion. This now means an average increase of £44 in every household's general insurance premiums.

Just some of the dodgy car insurance claims detected include not declaring motoring convictions, submitting an incorrect address and naming a parent as the main driver of a vehicle when it is mostly driven by a high risk motorist.

The ABI’s Director of General Insurance and Health, Nick Starling commented:  

"There is no hiding place for Full Story

We all like a bargain and insuring your car should be no different. But thousands of motorists pay more than they should every year by simply renewing with their existing insurer rather than shopping around first.

Whilst shopping around is a crucial step to bagging a good deal it's also important not to take special offers such as multi-car policies and 52 days' free insurance for granted.

Research by online insurer Swiftcover car insurance has shown that many offers are not as special as they appear to be, with drivers still paying too much for their cover.

For example, Swiftcover found that:

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