Major insurer says don’t get used to cheap rates

VAN INSURANCE NEWS ROUNDUP: 7 DAYS ENDING 22 AUG 2014:

One major car insurance provider recently rained on everyone’s parade recently, remarking that the good times are nearly over when it comes to cheaper rates.

Industry juggernaut Admiral, infamous for cornering the market for car and van insurance, said recently that despite the fact that insurance rates have reached amazing lows lately the party could be over before we know it. Whilst a more conspiratorially-minded individual might interpret this as a threat that Admiral is going to choose to increase their rates, I don’t think this is the case – I simply think that the insurance giant is remarking that the industry in general is likely to have no choice but to raise rates in order to remain profitable.

Yes, there may be stories of other car and commercial van insurance providers such as Direct Line turning a profit even as rates decline, but in instances like this their steady income growth is more due to cutting their costs by a wide margin than anything else. And let’s be honest here – rates are almost ludicrously low on average. In fact a new press release from the British Insurance Brokers’ Association claims that there’s been an overall 5.6 per cent drop in insurance pricing – or if you take inflation into account, an even 7 per cent drop. This is of course a fantastic bit of news, considering we haven’t seen rates like this for vehicle insurance since 2010 or so, but unfortunately the news is overshadowed by Admiral’s dire portents.

So what’s a responsible vehicle owner to do? Well there’s not much to do, honestly, except ensure that you lock in your premium pricing for the year as soon as possible. If you ask me, if you don’t shop around when your renewal comes up this year you’re going to be sorely disappointed a year from now when your rates go up by an eye-watering margin and you find out you missed out on some significant savings. This could be your last chance for many insurance cycles to come, so don’t do something – or fail to do something – you’re gong to regret later on. It’s expensive enough to keep a vehicle on the road as it is without having to pay through the nose for insurance as well!

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