Last week, the ABI (Association of British Insurers) confirmed that private car insurance (excluding business use) premiums had increased, on average, by more than 25% since September 2008.
It is of course easy to criticise the insurance industry for increasing their prices during a recession, but there are a number of reasons for this. These include increased repair costs, significantly reduced investment income and increased claims costs.
Motor insurance tends to lead the insurance market cycles. What this means is that when motor insurance prices increases, then all other types of insurance will tend to increase after this. This is because of the sheer scale of cars on the roads. Insurers cannot ignore it when they are losing money on motor insurance and have to increase their prices.
Whilst it is easy to concentrate on the headline increases, you need to look back over the past 9 or 10 years to see that insurance costs have remained virtually static. Unfortunately, there are likely to be increased premiums in commercial insurance as well. But, as this type of insurance has a much higher average premium, insurers cannot get away with 25% year on year increases. The increases will be much more gradual, probably around the 5/6% mark per year.
If you are careful and spend a bit of time looking, you can negate these increases by getting an online business insurance quote. Online brokers have to work to all the same rules as traditional, city centre, brokers but they can operate at reduced costs.