COMMENT: Are caravan owners facing higher costs for car insurance?

A rise in `crash for cash` incidents has fuelled speculation that fraud is behind the latest increase in car insurance

by Marcus Dubois

Over the last fortnight I have found myself chained to my laptop every evening browsing for car insurance quotes. And the results have proved grim reading, coinciding with recent findings that insurance premiums have gone up by 40% in the last 12 months.

Research by the AA revealed that over 12 months till the end of September, the average cost of comprehensive car insurance had risen to £792 – a jump of £39.3% since last year. This figure also happens to be the largest annual jump registered on its industry-leading ‘Insurance Premium Index’. So as Britain faces the grip of recession with greater than ever demands on our wallets, Caravan Times looks at the problem of rising car insurance costs.

Government inquiry

The debate has moved from grumbles around the dinnertable at home to the Houses of Parliament – and last Monday the Transport Select Committee painted a less than rosy picture. “It appears that the cost of motor insurance has rocketed” said the Committee Chair, and experts believe the costs could rise further after Britons take advantage of no-win, no fee lawyers to make increasing claims of personal injury.

Examples of the problem were shown on BBC Watchdog when Karen Nevey, insured by Sheila’s Wheels last year at a cost of £460, found her annual premium increased by 158% when up for renewal.
She told the programme “I went with Sheilas’ Wheels because they are a well-known reputable company. I don’t like changing insurance companies year by year, I like loyalty, I like to stick with an insurance company.” Yet with none of her personal circumstances changing, her quote increased “due to a three-fold increase in injury claims in her area within a six month period” according to Sheila’s Wheels. “Her details didn’t change but the claims lodged against other local drivers rose dramatically”.

In a similar case, insurer Direct Line said “the single biggest factor (for price rises) is the increase in personal injury claims and associated costs”. So how can caravanners, traditionally a low-risk group, keep their insurance premium as low as possible when taking this into account?

Rewarding careful drivers?

It is ironic that the very tool which can help you is also the agent which is partly driving up prices. Using a price comparison website can save up to 35% according to the Association of British Insurers, yet expert Graeme Trudgill believes “we’re seeing comparison sites keeping prices right down so [insurance firms are] not making the money they used to make”.

As proved earlier, loyalty isn’t always rewarded, so applying as a new customer can mean you receive greater discounts and incentives. It is also worth considering a policy with a higher excess, though remember that this is also the amount you may have to pay in the event of a claim. Using a specialist insurer which focuses on targeting older drivers or women can also help. Despite heavy marketing efforts from comparison businesses, going direct can have its rewards.

Have you been affected by dramatic increases in car insurance? Did you pay significantly more this year when renewing your policy? Click here to have your say on this story in our forum topic