In our last blog post we looked at the landscape of the insurance industry in 2014 and attempted to predict how insurance brokers would need to adapt their businesses in order to remain profitable during 2015. However, even though we are only a few weeks into 2015 there are already rumours that insurance premiums are on the rise for numerous types of protection including products created specifically for motorhomes and caravans. Continue reading
2014 has been an extremely interesting year for the insurance industry, regardless of the types of products you specialise in. Markets across the world have fluctuated at a considerable rate this year, so much so that at times brokers were unsure of the future of the industry. Even now, there is little agreement as to whether the UK economy is struggling or will improve over the next twelve months.
Motorhome insurance providers may have to re-examine how they set their insurance premiums in future if the Government acts on the results of a survey conducted by road safety charity GEM Motoring Assist.
It is clear from the survey that the general public feel that harsher penalties for drivers caught using hand held mobile devices should be introduced immediately, and that more should be done to catch the thousands of drivers who abuse the law every day. It is a view that will be shared by many in the motorhome and campervan insurance business.
At the moment drivers prosecuted for using a hand held device are given three points on their driving licence and a £60 fine; over 90% of drivers surveyed think the fine should be at least £100 with over 80% also urging the points tally to be raised to six points. Interestingly enough the general public also have the Commissioner of the Metropolitan Police on their side as he suggested a similar penalty in a recent radio programme. In the interview he also suggested that a driving ban for a second similar offence would drastically cut the number of people risking picking up a mobile phone when driving. In fact 210,000 people were prosecuted for using a mobile device last year and many observers think the figure for this year will be even higher unless the penalties become more draconian.
There is no doubt that using a mobile phone while driving is dangerous; statistics show that motorists are four times more likely to have an accident if they are using a mobile phone, which is probably explained by research that shows drivers reaction times drop by 50% when they speak or text while in control of a vehicle. However, it may well be sound advice to toughen up the law now while public support is evident, because mobile phones become ever more advanced and offer more and more varieties of use. The longer the law remains lenient, the longer it will take to wean the risk takers away from the danger.
Research has shown that older motorhome owners who use medication including sleeping pills, anti-depressants and mood stabilisers are 29% much more likely to be involved in an accident. The study examined local hospital/crash statistics to discover the increased danger for older people on the road. The study examined the case history of drivers aged 60 and over and who were hospitalised as the result of an accident over the last 6 years.
Because of the results of the research, mobile home owners are being urged to disclose every tablet they are taking to their motorhome insurance company to avoid finding out too late that their policy has become invalid due to them not disclosing certain types of medication.
Without doubt insurers are aware that some medications have the possibility of slowing reaction times and when age is taken into account, the insurance premiums will need to be adjusted making cheap insurance hard to find. This is where an insurance broker can use their contacts to find a competitive quote that takes medication into account. Up to one million people taking prescribed antidepressants currently hold a valid UK driving licence and although motorhome owners only make up a small percentage of this number, there are calls for the public to be better educated about the dangers of using medication and road safety.
The study is one of the first of its kind in the United Kingdom and has attracted attention internationally both for its results and the method of linking hospital data with the drugs being taken. By linking the data it was possible to see the link between drivers taking particular medications and those who had a crash and who were hospitalised. The results should not see any extra restrictions put on older drivers and it is hoped that the results can be used to make sure older drivers continue to have a better quality of life and continue to enjoy holidays in their motorhome and may in fact improve their longevity.
Motorhome insurance firms will be carefully watching developments in Northern Ireland after the Environment Minister’s bold proposal to reduce the driving age to just 16. Road safety organisations have already hit out at the Environment Minister’s radical proposal to lower the driving age as most are convinced that lowering the legal age for driving would be counter-productive in terms of road safety and insurance costs.
With a huge number of motorhome owners sailing to Northern Ireland each year, motorhome insurance companies will need to take into account the extra number of younger drivers on the road before working out premiums. This is because young driver crashes are normally the result of a combination of age and inexperience and statistics suggest that at 16 a driver would take more risks than a 17 year old. The minister believes that if a driver has a longer period of holding a provisional licence before passing a driving test, then there’s more likelihood that they are going to have a broader driving experience and therefore be a better driver on the other side of qualification. A recent study of 2 million motorists found 13% of those aged 17 have a crash. This compares with 6.5% of motorists overall. But when compared with older motorists, the difference is even more startling. Just 4.5% of motorists in their 40s are involved in a crash and 2% of those over 50. The average cost of an accident involving a 17 year old is almost £3,500 while the average cost of an accident for drivers overall is half of this amount.
The minister also suggested another radical change that could also affect motorhome drivers, because he wants learner drivers to be allowed to drive at 70mph. He feels it is important that learner drivers get used to driving on motorways before they are allowed to take their test. Thousands of mobile home owners use the roads and motorways of Northern Ireland each year and if more younger drivers are going to be on the roads, it is vital that they all have good motorhome insurance in case the worst happens.
Motorhome owners are being reminded that receiving a fine for a minor motoring offence could send their motorhome insurance premiums shooting skywards for years. A new survey has suggested that getting the fine is only the beginning. In some cases, the subsequent rise in insurance premiums can leave drivers nursing a bill up to four times as big as the original fine.
The research found that a driver’s first speeding offence could cost four times the typical £60 fine as insurance premiums for the driver may be increased for the following three or four years. However, drivers do sometimes get the chance to take a speed-awareness course which allows them to keep their clean driving licences and reduce the total cost of their offences; it can be invaluable in the long run. Anyone caught using a handheld device while driving can expect a bigger fine. In some cases the survey found offenders had been refused renewal by their existing insurers and they were forced to seek cover elsewhere. This was the case when eight motorhome insurance companies were asked about quotes after the driver had been given a £60 fine and three points on their licence. Four refused to provide cover, while the other four pushed up their renewal premiums by between 15% and 33%, with the average premium showing an increase of 18%.
It is also worth remembering that these offences will stay on a licence for four years, thus bumping up your next three or four yearly premiums. Even worse some police forces have been escalating a mobile-phone offence to a charge of careless or dangerous driving. This offence carries a much heavier penalty. Drivers are also being warned that there are very few insurance companies who are willing to ignore a first speeding offence nowadays. Almost all will penalise a first offence and a second offence will send renewal prices soaring by as much as 35%, with the average increase of 20%. What’s more, five of the eight insurers who took part in the research refused to renew after two offences making it much harder for repeat offenders to find replacement cover. In these circumstances asking an insurance broker to find a policy may be the best idea. The research concluded that these premium increases will remain, but reduce over three years. So a single speeding offence costing £60 may lead to another £200 extra in higher insurance premiums. This makes the £90 charge for a speed-awareness course a much cheaper alternative.