End of premium war for motor insurance
The continuing fall in premiums for motor insurance has come to an end. National Car Insurance have been the first insurers to increase all their premiums (for young people). London Insurance announces a premium increase for 2009 of five percent on average. The independent comparator ABC expects more companies to follow this example early next year. Main causes: a sharp fall in profits and the consequences of the credit crisis.
Decrease in car insurance premiums
At the end of 2005, a true premium war erupted among car insurers. The peak of the premium war is reached in March 2008 when newcomers such as Lender and Borrower enter the market. Due to the fierce competition, premiums have fallen by no less than 25 percent in just over two years. Car insurers can continue to lower their premiums because the use of the Internet provides considerable cost savings. In addition, the number of damage claims is falling considerably thanks to increasingly safe cars and roads.
However, the continuing fall in premiums seems to have come to a definitive end. Profitability has already fallen sharply in 2007, for 2008 this trend will only continue. Moreover, the effects of the credit crisis are also being felt in the insurance industry. After all, part of the premiums is invested. Last year, the declining profit could still be compensated with investment profits, but in 2008 they disappeared.
Save on car insurance
Despite the expected increase in premiums, consumers can still save enough. The premium difference between the various car insurers remains huge. Earlier research by ABC has shown that, with equal coverage, a car owner pays twice as much for the most expensive car policy as for the cheapest car insurance. So comparing still pays. It has been shown that cheap car insurance often offers better coverage than expensive insurance. The coverage of the current policy is therefore no obstacle to switching. On average a motorist can save 171 euros on his car insurance. A simple calculation shows that Dutch people together pay 1.2 billion euros in premium.