You may have noticed that your insurance premium has increased compared to previous years. This isn’t unique to Vavista and is a common trend across the industry. According to the Association of British Insurers (ABI), the average car insurance premium rose to £627 by the end of 2023, a 34% increase from the previous year, reaching its highest level since ABI started recording data in 2012 [1].
Insurance premiums are not the only costs rising; groceries, electricity, and even streaming services are also becoming more expensive. Although we, as a business, may not directly relate to the cost-of-living challenges you face, insurance companies nationwide are experiencing the pressures of rising costs, mainly due to higher claims costs and inflation.
Why Are Claims Costs Rising?
- Repair Costs: Insurance claims often require repairs, whether for cars or homes. The expenses associated with parts and labour have surged due to supply chain issues, inflation, and labour shortages. In Q3 2023, vehicle repair costs jumped 32%, reflecting rising costs and more expensive repairs [2].
- Vehicle Theft: There was a 35% increase in vehicle theft in Q3 2023, leading to a higher number of claims [3].
- Inflation: The rising cost of repairs and replacements is primarily due to inflation. It’s becoming more expensive for insurers to carry out repairs on vehicles or properties.
- Payout Amounts Rising: When a vehicle is deemed a total loss, insurers compensate based on its current market value. Inflation affects vehicle values, leading to higher payout amounts and further straining insurers.
What Can I Do to Reduce My Car Insurance Premium?
- Be Honest: Always provide accurate information. Misrepresentation or lack of disclosure can lead to serious issues, including policy voidance and no payout in the event of a claim.
- Timing Your Renewal: Plan ahead and give yourself time to secure the best rates. Rushing to get coverage often results in higher premiums.
- Pay Annually: Paying annually can save you money in the long run, as monthly payments often include interest, making your annual premium more expensive.
- Add a Named Driver: Depending on the added driver’s experience and history, this can save you money. However, be honest about who will primarily drive the vehicle. ‘Fronting,’ or dishonestly designating the main driver to get cheaper insurance, is illegal.
- Avoid Car Modifications: Modifying your vehicle might invalidate your current coverage if these modifications aren’t covered by your insurer. They can also increase future insurance costs. Check with your insurer before making any changes.
- Avoid Unnecessary Extras: Optional add-ons can be beneficial but may not suit everyone. Assess which add-ons you may not need to help lower your premium.
- Occupation: Inform your insurer if you’ve transitioned to a remote or hybrid role. Reduced driving in these roles can lower your premiums. Always be honest about your occupation to avoid insurance fraud.
Renewing Your Policy
Vavista offers a range of car insurance products to provide peace of mind. We also offer optional extras such as legal expenses cover and RAC breakdown.
Vavista is committed to providing affordable and reliable car insurance. While car insurance is a necessity and a legal requirement, the right policy could save you money. Vavista offers competitive car insurance with various policy options to suit different customers and budgets. Comprehensive car insurance offers extensive cover, ensuring protection against all possibilities. We also offer value-added services like extended warranties and specialist insurance for vintage and specialised vehicles.
For more information on our products, please visit our website. Be sure to check the policy wording before renewing with a new product to ensure you’re fully aware of its limits.
