Motor Insurance, Home Insurance Costs to Rise in 2009
Reading newspaper headlines in recent months you could be forgiven for thinking that you have fallen into a time warp back to the 1980s. That feeling could be reinforced next year as an old and for a long time intractable problem - rising insurance prices - is set to return.
A survey by Deloitte last month showed that 80% of insurers expect premiums to increase by up to 10% next year. The AA’s own estimates are similar. It certainly looks as if we are facing heftier bills.
We have had a good run on insurance prices in the last few years with premiums falling steadily. In fact there have been premium reductions for each of the last 5 years, to the point where motor insurance had never been cheaper. We will not lose all of those gains immediately but the reality is that prices are going to go up.
Although the number of people being killed in accidents is reducing the number of collisions occurring is not. Cars are getting damaged and people are getting injured. The cost of medical bills and all other related costs have been rising. Inevitably that had to be reflected in premium increases at some stage. They have been held up until now only by the intensity of competition.
2009 may see another milestone. We cannot be sure yet but it looks as if by early in the new year and for the first time ever, the average Home Insurance cost will be higher than the average car insurance cost.