With the date now passed when individuals or organisations can register their experiences of the UK car insurance industry with the Office of Fair Trading (OFT), motorhome insurance providers along with the rest of the motor insurance industry will have to wait and see what the OFT’s referral of the industry to the Competition Committee brings.
It is little wonder the industry has at last shown up on the OFT’s radar, as millions of words in newspaper columns and TV news programmes have been devoted to horror stories involving the cost of motor insurance. In fact the OFT referred the private vehicle insurance trade to the Competition Committee saying they believe that certain factors in the industry compete in a “dysfunctional way”. They were probably influenced by figures such as those revealed by the latest British Insurance Premium Index which shows the average price of a third party fire and theft motor insurance policy is now just under £2,000 (£1,959). Incredibly the same index shows that young males aged between 17-22 are now paying on average £4,170 a year, which must be in many cases more expensive than the vehicle they are insuring.
The OFT investigation along with that of the House of Commons Transport Select Committee was highly critical in the way that the insurance companies of at-fault drivers had little control over the costs of the insurance claim, with the OFT’s Chief Executive, John Fingleton, summing up the investigation by saying “Competition in this market does not appear to work well for drivers. We believe the focus that insurers have on gaining the competitive edge through raising their rivals’ costs means drivers pay more than they need to for their motor insurance policies. There doesn’t appear to be an appropriate quick fix to these problems. We have provisionally decided a more in-depth investigation by the Competition Commission may be necessary.”
However, many in the industry will be hoping the sector gets a chance to defend itself, and will certainly point to initiatives by some insurers to bring down the costs of insurance for young drivers by fitting a telematics device in the car. These will monitor the driving habits of the motorist and reward good driving with smaller insurance premiums. A spokesman for the Association of British Insurers (ABI) welcomed the report saying the ABI hoped the Competition Committee’s investigation would lead to smaller premiums for the UK consumer.
Motorhome insurance providers will note with interest that foreign diplomats have run up a £58 million motoring offences bill that appears to have little chance of ever being settled.
The massive bill came to light from information given out by the Foreign and Commonwealth Office (FCO) who revealed that the bill was made up of unpaid motoring fines from a total of 64 different countries. At a time when insurance companies come under increasing pressure from all sides of the motoring spectrum to bring down motor insurance premiums it seems remarkable that the incumbent government have failed so miserably at collecting fines from fellow diplomats.
The USA is the biggest fine dodger by far having run up an unpaid bill of over £6 million for congestion charges and apparently they refuse to pay the fines saying diplomatic immunity excludes them from having to pay local taxes which they claim congestion charges are. So much for the special relationship then! Japan, Russia and Germany all owe figures in excess of £3 million. If the London Olympics offered medals for countries that owed the most in parking fines then Nigeria would run away with the gold. They rattled up a bill of £67,000 last year alone… all of it unpaid of course.
Foreign Secretary William Hague insists his department badger the foreign embassies for payment of the fines and Earl Atlee reported in the House of Lords last year that London mayor Boris Johnson had tackled President Obama about payment of the £6 million when he visited the UK. On a more serious note the FCO also revealed that 5 foreign diplomats were suspected of breaking the UK’s drink driving laws in 2011. The embassy officials came from Angola, Kazakhstan, Korea, Kuwait and Ukraine. All managed to avoid criminal charges because of their diplomatic immunity.
It will come as no surprise to the majority of motorhome insurance providers that a report collated by a group of actuaries has come to the conclusion that claims for personal injuries following a road accident are rapidly getting out of control.
The report from the Actuary Profession warns Government and insurers alike that the present situation cannot continue, and action must be taken quickly. The report points out that although road accidents fell by 11% in 2011, claims for personal injury actually went up by 18%. The authors of the report estimate there will be an additional cost to the insurance business of around £400 million because of the claims, and the great majority of the money paid out will be for an injury that is almost impossible to prove.
Whiplash injuries are by far the most common cause of a claim and Government agencies and insurers are united in believing that a reduction in such claims is absolutely vital if motor insurance is to remain financially viable for the mainstream of drivers in the future. Many believe the medical diagnosis of the condition for insurance purposes needs to be changed. Actuaries are absolutely certain if change is not brought about, then the only outcome can be more expensive motor insurance policies for all. The report highlights higher fuel prices as being the main reason for such a fall in accidents, explaining that motorists made fewer journeys because of the financial implications. The rise in claims is put down to the growing industry centred around accident management.
It is hoped that the report will put some urgency into Government plans to revolutionise practices surrounding road accidents, and in particular the burgeoning business conducted by law firms who are quick to start the legal ball rolling knowing they will benefit from any claim. The Government are also keen to stop insurance firms and accident management companies from passing on personal details of motorists caught up in accidents.
A report from the Royal Society for the Prevention of Accidents (RoSPA) will shock motorhome insurance providers across the UK today as figures for road deaths show an increase for the first time in almost a decade.
The disappointing figures showed that 1901 people lost their lives in road accidents in 2011, a 3% rise from the 1850 in 2010. Unfortunately 60 of those who died were children, an increase of 9% and 453 were pedestrians a rise of 12%. It will be difficult for experts to get a grip on the reasons for such an increase because confusing statistics arise across the whole spectrum of victims.
For instance although more children died, less were seriously injured, the actual number involved in accidents where serious injuries occurred hardly changing. Conversely an encouraging drop of 10% in the number of motorcyclists killed was offset by a 10% increase in the number of motorcyclists seriously injured and in fact the scale of accidents involving motorcyclists increased by 8%. Similar confusing statistics emerged from figures affecting cyclists. The 4% drop to 107 cyclists losing their lives will be seen as a great improvement considering the number of cyclists who now use the roads in the UK, but once again the encouraging drop in fatalities was overwhelmed by a 16% increase in cyclists seriously injured.
Of course, while RoSPA expressed extreme disappointment in the figures it has to be remembered the cut in deaths and serious injuries over the last few years has been dramatic. However, many of those in road safety and motor insurance believe a lack of leadership involving road safety campaigns from the Government has a bearing on the figures, and indeed RoSPA has called on the Government to bring local authorities and police forces together to see what can be done to halt this blot on road safety in the UK.
If motor home insurance providers were ever in any doubt which one single item persuaded customers to go for their product, a recent survey conducted by one such provider should leave them in no doubt.
In fact the survey was conducted on what persuaded people to buy a motor home but the result applies equally to the insurance they cover it with, or at least it is a fair bet that it does. The survey gave prospective vendors a choice of five categories to choose from and asked them which one would most determine their eventual purchase. The choices were; brand name, appearance, comfort, performance and price. The survey was conducted over several months and took in the views of over 250 customers, however, there was only ever going to be one winner in these difficult times even though many observers would see the purchase of a motor home as a luxury item that is not affected so much by the dire financial climate.
Of course the winner by the proverbial country mile was price, and at a time when motoring is at its most expensive there is really little wonder. All the other categories had their support with comfort coming a very good second, which may confirm in fact that motor home ownership is indeed a luxury. Appearance and performance came in third and fourth respectively, polling 10% and 7% of the votes leaving brand name at the bottom with just 3% saying it was the most important factor. The results must be a big worry for many manufacturers who have spent years building up confidence in their brand, in a similar way to well known motor home insurers, and will come as a stark warning that every sale has to be fought for and there is no room for complacency!
In all 65% put price as their prime mover, including on-costs, and although it may not come as any surprise it should serve as a reminder to people in the motor home business just what customers are looking for.
Reports from one the UK’s leading tyre and brake replacement service companies shows why motorhome insurance providers alongside other motor insurance providers have such a difficult time in reducing premiums.
A recent survey by the Kwik Fit company on motorists’ attitude to tyre checks reveals just how much work there is to do when it comes to educating some of the UK’s drivers. It is without doubt that tyre faults and brake malfunction lead to a major proportion of motorhome insurance claims in the UK and yet if the Kwik Fit surveys are to be believed a great number of UK motorists have not yet made that connection.
A study by the company found that 70% of drivers regularly drove on under inflated tyres. An under inflated tyre affects many facets of driving; it can make steering the vehicle more difficult, it can put pressure on the braking system and in extreme cases cause a tyre to collapse and leave the driver with a highly dangerous “blow-out” situation. Under inflated tyres make motoring highly inefficient from a fuel angle and adds to the cost of motoring. This may probably explain why 11% of the drivers interviewed said they didn’t replace worn tyres because they could not afford to do so. Astonishingly two out of five motorists did not know how to check their tyres were compliant with legal requirements and this despite a quarter of the 2000 people surveyed saying they had suffered a puncture in the last 12 months.
Dealing with a punctured tyre also proved to be a bit of a struggle for many motorists. Over one in three, 36% said they had the tools to mend the puncture but did not know how to do it, while 10% said they had a spare tyre but no tools to fit it. The same amount said they had a spare tyre but were unaware what kind of tyre it was while 4% admitted they didn’t have a clue whether their vehicle had a spare tyre or not.
It is clear from the report that bringing down the number of accidents on UK roads thus bringing down the premiums on motorhome insurance policies is not ever going to be a simple undertaking.