Saturday, 29 October 2011
British Auto Insurance Industry Under Investigation
Britain’s Office of Fair Trading and the House of Commons Transport Select Committee are investigating the auto insurance industry in that nation to try and figure out the how the companies work and how they set their premium costs. This comes just days after some British insurers boasted about their rates going down.
In late October Britain’s Automobile Association (AA) said that premiums were falling and other experts claimed prices were tumbling by quite a significant margin. But that came as news to most drivers and some investigating was done by some of Britain’s leading newspapers including the Telegraph.
They found that not only did it cost more to insure a car in 2011 compared to 2010, but they rose higher than the national inflation rate, which was at its highest level in the past 20 years. The British Insurance Premium Index was studied and it revealed that the average cost for comprehensive insurance rose by 16 per cent while third party, fire and theft coverage jumped up by 21.4 per cent.
It’s also been reported that the average cost of comprehensive auto insurance in Britain is now £1,500, which is approximately U.S. $2,400. This is an increase of 288 per cent when compared to the cost in 1994. But that’s nothing compared to third party, fire and theft policies as they went up 354 per cent over the same time period. In fact, third party, fire and theft policies in Britain offer less coverage than comprehensive, but often cost more.
Some companies are advertising the fact that customers are saving money on premiums by suggesting they’re paying lower premiums or the same price as last year. But the investigation showed that auto insurance price-comparison websites were actually raising the costs even higher than the insurance firms were, and possibly pocketing the difference.
The AA insisted that for each 100 British pounds the auto insurance industry took in during 2009 they were paying out a total of 123 pounds, but they have neglected to give out the figures for the past two years when premiums have soared.
According to an article by the Telegraph, it seems the only way some Britons can escape the high costs of auto insurance is to purchase cars that cost less to insure when it comes to Britain’s insurance rating system for vehicles.
