Car insurance premiums not rising at the same speed as in UK
Over the last quarter, motor insurance prices in the UK have risen by 6%, reaching £554 per annum.
Oliver Goater, managing director of Network insurance, believes the increases are due to a ‘combination factors following the pandemic as well as inflation, which is no doubt having a significant impact on claim costs and repairs for insurers’.
He said motor insurance has always been less expensive in Guernsey, with an average local premium of £350 reflecting the lower range of claims, due to lower speeds and reduced risk of theft in Guernsey.
Paul Cotterill, director of Oracle, said he would not expect to see dramatic rate increases locally.
‘We are not seeing too much change in rates, it has been relatively static,’ he said.
‘Generally over the last few years, the motor ratings have slowly increased, but not dramatically like they have in the UK.’
Mr Cotterill said he may expect a small increase of about 2 or 3% per annum.
Mr Goater said that increases would be more likely linked to inflation than increasing claims.
‘The average cost of vehicle repairs is now rising due to inflation as well as increased reinsurance costs,’ he said.
‘Premium levels are probably lower than insurers require in order to keep up with inflation, as well as vehicles being more sophisticated and ongoing supply chain issues forcing longer repair times.
‘With inflation increasing, if the number of motor claims rise it will have an impact on claims costs, so I would expect some insurers may have to consider a small rise over the next 12 months.’
‘As an example, Islands has increased private motor rates by 2% so far in 2022.’
According to a report by thisismoney.com, the UK rates are still relatively low, falling ‘well short of the pre-Covid average, which stood at £770 at the end of March 2020.’
In April 2021, UK insurance premiums had fallen by around 6% in the previous 12 months, which was a direct result of Covid lockdown measures on the nation’s driving, and consequential claims experience.
Mr Goater said: ‘My advice to consumers would be to speak with an insurance broker, as they have access to multiple insurers and should be able to put forward a number of options to meet a policyholder’s need, which will take into consideration the cover available as well as price point.
‘If consumers are direct with an insurer they either have to spend a time shopping around themselves, or believe that their insurer is giving them the best premium and service.’
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