The cost of insuring a motorhome is one of the most contentious issues facing owners, but after several years of premium increases, there are encouraging signs that the cost of cover may be beginning to fall.
In July, research showed that the average cost of comprehensive cover had fallen £47 since the end of 2011, bringing the average premium down 7.1% from a year ago. This downward premium trajectory comes as little surprise to many in the insurance industry who have been expecting rates to turn because the market was ready for an adjustment. A number of factors have contributed to the reductions including incoming legal changes, such as the ban on personal injury referral fees due to come into force in April 2013, and the removal of recoverability of success fees are also beginning to apply downward pressure on rates.
Meanwhile, the fight against fraud is having its own impact on rates. Fraud detection has improved thanks to insurers using more sophisticated controls and validation processes to identify potentially fraudulent applications as early as possible. There’s been much innovation in this area and insurers can now identify issues in 1 in every 10 applications they receive. Spotting them at this stage means they prevent more serious instances of fraud while the policy is in force.
The sharp rise in fuel prices throughout 2011 affected motorhome owners more than most, however, research shows over three quarters have decided not to cut back on their driving habits. The good news for motorhome insurance firms was that drivers of all other vehicles decided to cut back on their mileage, which meant during 2011 there was a reduction in the number of accident claims. The battle for business is likely to take on a new dimension later this year when gender neutral rates come into force, and with gender taken out of the equation, insurers will be looking for additional data on which to base prices. Insurance brokers are expected to be very busy as motorhome owners of all ages look for competitive polices. It is not all good news for motorhome owners as in the years to come they are more likely to be hit by costs such as tolls, congestion charges, fuel prices and parking rather than by rising insurance premiums.