Insurance brokers are advising motorhome owners that choosing a higher voluntary excess on their motorcaravan insurance may cost them more in the long term because in some cases the impact on premium prices is minimal. Research analysed the cost of motorhome insurance using a range of voluntary excess levels, from £0 to £500 in order to evaluate the effect on prices of premiums. The research found a difference of around £180 to the yearly cost of premiums when comparing the average cost of a £0 excess to a £500 excess. However, a mobile home owner who opts for lower premiums and sets the excess level at around £500 could be creating a costly false economy should they need to make a claim on their insurance policy. This is because the difference in premiums is only £25 when comparing a £200 excess to a £400 excess. So anyone who is looking for competitive insurance needs to consider whether the short term savings are worth potential higher costs in the future.
Brokers advise drivers who are looking to cut costs to be aware that changing the excess level is not always a cost effective option. It’s crucial to set the total excess at a level the driver can afford to pay, and also one that makes claiming worthwhile. For example, if the driver had a £100 total excess and then made a claim for £500, the driver would have to pay the first £100 and the insurer would pay the remaining £400. However if there was a £500 excess the driver would have pay the entire amount, which makes a claim pointless. A broker can advise about excess levels before any policy is purchased. Drivers then may want to consider other ways to save money on premiums, and there are plenty of options. Fitting an approved alarm and immobiliser, such as a Thatcham 1 or Thatcham 2 should certainly cut premiums as should fitting a “smart box” particularly if you are a younger driver. The smart box monitors driving habits and will enable a young driver without a no claims bonus to demonstrate to insurers that he is a responsible driver more quickly than waiting for years of accident free motoring.
Another option is to ensure the premium charges reflect the mileage a driver will cover in a year; it is pointless paying for 20,000 miles worth of cover if the driver only travels 5,000 miles in the period.
As MPs and ministers meet once again with road safety organisations and insurance providers to thrash out the problems surrounding motor insurance, research out this week shows that motorhome insurance, in common with most other types of vehicle insurance, has risen 20% just because of claims from whiplash injury.
The report from the Association of British Insurers (ABI) highlights whiplash claims as the number one reason why insurance costs are soaring. The report says claims for whiplash have gone up 33% over the last 3 years with last year seeing an incredible 570,000 claims which cost the industry over £2 billion. The ABI reckons the claims put an average £90 on each premium taking the average cost of motor insurance well past £500 per annum. The report also suggests that a complete industry has grown around claims for an injury that is very difficult to disprove. Not only are fraudsters taking advantage of whiplash claims but also accident and claim management companies, lawyers and even insurance companies who are not slow to benefit from referral fees.
The report suggests that in a year when London hosts the Olympics the UK would be certain gold medals winners if whiplash injury was declared an Olympic sport! The ABI have not been slow to put forward their own ideas to the government think tank looking into the motor insurance problem and have once more reiterated their proposals. They believe first and foremost that a cap on payouts is introduced quickly, and following on from that the criteria for lodging a claim be rigorously changed. They advocate a speed threshold should be introduced that disallows claims if the vehicle is travelling below the threshold. That GPs are replaced by medical panels when a claimant’s injuries are assessed and that claimants receive no pay out for general damages unless it is backed up by objective medical evidence.
There is no doubt that motorhome owners would welcome some respite from the continuing rising cost of motoring and it seems that radical changes in the way insurance premiums are costed may have to be brought about if the law abiding citizen is to continue enjoying motoring in the UK.
The honesty of UK motorists has been brought into question in a big way following the release of a survey on drivers’ attitudes to minor accidents. A recent study has revealed that the cost of accidents caused by careless car parking is thought to have contributed to over one million pounds worth of damage every year that vehicle owners pay for themselves or have to claim on their own insurance policy. The research showed that 1 in 6 drivers would never leave their insurance details when scraping against another vehicle and 45% would only consider it if the damage looked serious, leaving the victim to sort out the repairs at his own expense.
The vast majority of the incidents take place on the public highway on side streets where motorists are either in a rush to get to work or to get their children to and from school and are forced to pull out of tight spots. The consequence of this is that victims on average end up paying out £1000 in repair costs for damage caused by so-called ‘prang and runs’ because they do not want to make a claim on their insurance policy. If they do claim they will also risk losing their no-claims bonus and have to pay what could be a hefty excess charge on top.
Experts who specialise in motorhome insurance are advising mobile home owners to be careful where they park and whenever possible, avoid tight spots where another vehicle might try to squeeze in, making it vulnerable to damage. The research also found that the majority of cases happened when the owner was not in the vehicle. Therefore, when the owner returns to the scene they are normally left with evidence of the accident but with no idea who caused the damage, and in many cases owners don’t realise they have been hit until hours later.
A spokesperson for the company who carried out the research said: “Most of the time these incidents are unfortunately unavoidable, as in busy built-up areas where parking is limited accidents can happen. However, if there is another parking option available or somewhere with more room for tricky manoeuvres, this is probably a much safer option for somewhere to leave your vehicle.” Even those who aren’t involved in an accident are paying the cost for these accidents as every case reported pushes up the cost of motor insurance.
Drivers who find their vehicles damaged in public car parks fare even worse with the report revealing that a massive 96% of motorists end up paying for the damage themselves.
Motorhome owners could be looking forward to lower motorhome insurance premiums after the insurance summit meeting held between Government Ministers and insurance experts at Chequers yesterday.
Prime Minister David Cameron famously called the UK “The whiplash capital of Europe” before the meeting and sure enough this was one of the biggest factors discussed at the table. At the end of the day the summit managed to agree on a plan to tackle the most urgent factors causing the massive escalation in insurance premiums across the whole gamut of insurance protection.
The Government have promised to tackle the legal industry who are blamed for much of the costs incurred in insurance settlements but are also adamant that insurers should not be using referral systems either. They promise to reform the ‘no win, no fee’ system and ban referral fees; they will also extend the road traffic accident claims process to cover employers liability and public liability. For their part insurers have agreed to pass on any savings directly to customers in the form of lower premiums.
All parties present agreed that the level of claims for whiplash injuries, currently 1,500 per week, was totally unacceptable and measures had to be taken to reduce them. It was agreed to investigate all options over the coming months including a requirement of improved medical evidence, a specific speed limit below which claims cannot be entered and a reduction in fees that lawyers can earn from pursuing whiplash claims through the small claims courts.
All parties also agreed that the number of accidents involving young drivers and the cost of their insurance must be tackled, with the new smart box technology favoured by many at the meeting.
Director General of the Association of British Insurers, Otto Thoresen, attended the meeting and said: “The cost of motor insurance reflects our society where it is all too easy to make spurious and exaggerated personal injury claims, where excessive legal costs can outstrip compensation awards and that tolerates the high levels of deaths and serious injuries involving young drivers and their passengers. Urgent action is needed to tackle the surge in whiplash claims which now cost insurers £2 billion a year and push up premiums for all motorists. Tackling these issues will bring down motor premiums.”