As the average cost of a motor insurance policy soars yet again according to a report out this week, motorhome insurance providers are caught in something of a dilemma. Should they raise their own premiums to stay in line with other providers or slash their prices in a bid to get new custom and a larger user base.
The AA British Insurance Index revealed earlier this week that the average price for motor insurance in the second quarter of 2012 had risen to £1034, an 8.5% increase on the same period last year and a massive blow to motorists looking for some relief on the ever soaring cost of driving in the UK. In fact the news was much worse if you are in the 17-22 age group with the average for a male going to £2,792 and females doing slightly better at £1,995. Simon Douglas, director of the company who published the report said the insurance industry is in turmoil as they fight to get on top of fraudsters who are wreaking havoc by putting in false claims.
Industry experts say they are battling the fraudsters on all fronts including the crash for cash criminal gangs who arrange motor accidents to make fraudulent claims. They believe new systems put in place by the DVLA will enable insurance companies to identify application fraud more easily, and the new strict rules whereby vehicle owners can have their motors confiscated if they are driven without a valid insurance certificate will definitely deter some. However, the curse of the whiplash claim has still to be met. It cost the insurance industry £2 billion last year and effectively put around £90 on the premium of every vehicle owner in the UK. It appears that only some sort of Government legislation is going to curb this blight on modern day insurance.
The index certainly highlighted the difference a post code can make to an insurance application, with the average price for a policy holder in Greater Manchester and Liverpool costing on average £1,648, while the average price in Scotland was less than half of that at £727. Motorhome owners will obviously welcome the fact that some insurers are cutting the cost of their premiums to attract new customers but they should be wary of the policy they buy and ensure it is a policy that gives them the cover they require.