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Every year, with varying degrees of financial pain, it’s a hassle to get my cars insured. With insurance premiums on the rise, how can I get a better deal?
Life would be simpler if I had one car. But I don’t. I have six. Arguably, I’ve unnecessarily complicated my life. Some people like having children. I like owning cars. Anyway, who doesn’t need a range of vehicles? You can’t be expected to use the same car to pop to the chippy — that needs a Rolls. As for turning up to the tennis club, that requires a pimped-up Jeep.
An antiques hunt necessitates a 1980s Mercedes R107 SL. For a supermarket trip, a 1990s BMW 8 series with pop-up headlights and a big boot is a perfect choice. The only reasonable steed for a European road trip is a convertible Aston Martin.
And for those longer commutes, of course it has to be a practical electric SUV. I own a Jaguar I-Pace. It’s good for ferrying the dogs while avoiding the appalling ultra low emission zone and congestion charges imposed by London’s (night)-mayor. All these cars need insurance.
According to Confused.com, the average cost of car insurance rose by 20 per cent over the past 12 months. But they’re not universal. Premium increases rather depend on what you’re insuring, where you live and which finger someone stuck in the air to calculate prices.
A few years ago, I visited the life laundry (my way of sorting out problems by sleeping on them) and decided to clean up my act. I bought a single policy for all my cars. It worked. With the odd check here and there to ensure I wasn’t overpaying, it was easy to manage. My insurance broker — yes, they still exist — did a terrific job. Saving four figures and a lot of time on admin too.
I really dislike internet-based insurance offerings. Life’s too short and I have lunches to attend, the dogs won’t walk themselves and how am I supposed to catch up on all the back episodes of Succession and Colin From Accounts and actually drive all the cars I own, if I have to waste time arranging insurance?
But sometimes you have to dance with the digital devil. Two years ago, to my annoyance, Hiscox doubled its premiums for electric cars. I’d chosen it because it insured new and classic cars. The company offered a tasty discount because I insured everything else with them too. The rise was too much and I needed to save money and go elsewhere.
Holding my nose, I dived in, sampling the delights of all the comparison websites and then those insurers who only sell direct. This led to the subsequent spamming of every electronic device I own with ads and email reminders.
I settled on Direct Line for the Jag. They were so cheap that when one of my other cars, the pimped-up midlife crisis Jeep (it has orange leather seats), suffered a similar premium increase, I added that to my Direct Line policy too, saving over £1,000 in the process.
So far so good. But this year it’s all gone a bit wrong.
Imagine my anger when I received an inflated quote for the Jag? I’ve not made a claim in the past few years, have no points on my licence and haven’t moved house. So you’d expect the premium to remain reasonably steady. Wrong. Up from £1,324.33 to £2,387.31. How much?! Of course, I phoned to discuss. Never accept the first quote, they say. Premiums, I was told by Direct Line, had gone up by 35 per cent (as, indeed, the Jeep premium has).
I didn’t study maths to the age of 18, but even I can work out that on their calculations the premium shouldn’t be much more than £1,787.85. They had no reasonable explanation for the rise and said it was a take it or leave it option. Goodbye.
Perhaps, with insurance, a premium is never going to be “fair”. You’re pricing a calculation based on the law of averages and crystal ball gazing.
The only option was going back to the comparison websites. The best quote was £1,430 with a £500 excess from Admiral. Hovering over the “purchase key” I wondered if I should revert to my broker and Hiscox to see if they might be interested?
Hiscox wants to increase premiums for the four cars I already insure with them. Thankfully by only 7 per cent, and it seems to want my business back. The company is offering multi-car discounts, cancelling out the rise. And the excess amounts applied aren’t as high.
But if you move insurers, they’ll want to agree values, which means sending photos of all your vehicles and getting valuations from a garage. Argh!
We all know you must research the market, using the comparison websites for comparables, play around with the excess to reduce the premium and check the valuation for the cars. That’s all obvious. However, there must be more to Direct Line’s uncompetitive quote and unwillingness to negotiate than meets the eye. Peek into the company pages of the FT and you’ll see the real story.
Direct Line has an acting chief executive after it parted company with the last one, taking a full year salary pay-off in the process. It swung from a pre-tax profit of £446mn in 2021 to a £45mn loss in 2022. It cited the Ukraine war and inflation as excuses (which company doesn’t do this?) but there may be a bigger issue here.
It’s strategy. Admiral and its connected brands may have seen a reduction in pre-tax profits from £769mn in 2021 to £469mn for 2022 but it’s clearly intent on retaining its top spot when it comes to UK market share for car insurance by offering competitive quotes in that sector rather than branching out. So, it’s able to blow the competition out of the water. Meanwhile, Direct Line with its scatter gun seems intent on chasing its customers away. If I were a shareholder, I’d be worried.
When I put all this to Direct Line, the company said it always encouraged its customers to shop around for a range of quotes. “We price customers’ policies based on our view of risk and the ratings factors we use, including the model of car and inflation.”
Would Hiscox be interested in taking back my business? Given the exorbitant quote I’ve just received for the Jag, it’s not. The company fails to appear in a 2022 ranking by market share of the UK’s 10 largest car insurance companies by NimbleFins, a personal finance site. Indeed the chief executive’s strategy statement in its most recent results emphasised growth but talked about “building out balanced portfolios in our bigger-ticket business”.
It’s just not geared up for the modern car insurance market which operates on fine margins. For all the disruption in the marketplace by the consumer-facing comparison sites, to save time and money you’d be wise to establish which company is well funded, actively chasing new business and wants to grow.
Thankfully, this year’s renewal is almost over. In future if I’m to reduce premiums there are two routes. Sell a car or study the financial pages. Guess which option I’ll be taking?
James Max is a broadcaster on TV and radio and a property expert. The views expressed are personal. Twitter: @thejamesmax
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