Lowered petrol prices lead to higher insurance premiums


Well if this just doesn’t prove my point that you’re damned no matter what you do: new research says that when petrol prices drop, insurance premiums rocket.

That’s right, ladies and gentlemen, you heard it here first: you officially can’t win. If you’re finally relieved to see you’re not suffering any more pain at the pump due to petrol prices dropping like a stone, you can look forward to your car insurance or van insurance rising to compensate for the sudden extra cash you had. Imagine how bad fleet owners feel after having to pay even more for their commercial van insurance cover, after finally breathing a sigh of relief that their fleet of commercial vehicles won’t be burning a hole in their pocket at the petrol pump!

So how does it work? Well it’s ridiculously simple, actually. As petrol prices come down, insurers figure that this means motorists will have more cash to devote to filling their tanks. This works out to drivers feeling like they can motor about more than they do when they’re suffering from high petrol prices, so insurers decide that the roads will inherently be more dangerous because everyone’s out and enjoying a nice day or two just driving about without having to worry about taking out a mortgage to fill their tank at the end of the week.

It makes sense statistically but it’s truly frustrating for drivers, don’t you think? Also, it’s not like rates go up that much during times of cheap petrol – research says that over the last three months as petrol prices dropped insurance costs went up by a paltry 2 per cent – but it’s the principle of the thing that rattles my cage. Can’t we just enjoy the fact that we’re not being squeezed at the pump without our insurance companies trying to squeeze every last penny out of us?

Do you know what a 2 per cent rise equates to on average. £12 a year. That’s not much individually but taken altogether with millions of motorists that adds up quickly. Does the insurance industry really need that much extra cash? What are they doing with it all anyway besides trying their best not to pay out on fake whiplash claims?

© 2022 All rights reserved. Reproduction in whole or in part without permission is prohibited. See our copyright notice.

Share your views

To leave a comment on this story, please insert your details below.