We are all more than aware that the car insurance market is in turmoil. Prices have escalated by 40% in the past twelve months, and 5% of motorists have been forced off the road by the rising running costs which comes hand in hand with car ownership according to Moneysupermarket.com.Written September 2011.
With prices going up, you would expect the additional features covered by your insurance package to expand or at least stay the same. However, a number of insurers are reducing the additional features which come as standard in their insurance packages in an attempt to both cut costs and offer more competitive deals their competitors.
What is being cut out?
Breakdown cover used to be offered as standard with the vast majority of insurers, but it is a costly solution, as the insurer is offering an additional service for free which would usually cost between £30 and £50.
However, it is legal cover which is perhaps the greatest cause for concern. A number of insurers are omitting this from their packages without specifically highlighting it to insurance customers. This is why it is so important to check the small print on the policy before agreeing to it according to MoneySupermarket.com car insurance expert Peter Harrison.
One insurer with a presence on price comparison websites currently offers two different insurance packages for customers. One is a basic package which doesn’t feature either breakdown cover or legal assistance, while the other features both of these. However, the more complete option is generally 10% more expensive than the basic package, which equates to a price difference of about £90 for the average motorist.
Why is legal cover being targeted?
Legal cover is becoming an increasing burden for insurers due to the fact that the number of personal injury claims being made has increased by 70% in the past ten years according to the BBC.
Industry experts such as the AA’s Simon Douglas are blaming this phenomenon on the “fast growing black market” for personal injury claims lawyers. This is corroborated by Graeme Trudgill from the British Insurance Brokers Association (BIBA) who claims that the “increasingly aggressive marketing techniques” employed by these groups, although not being technically illegal, are potentially encouraging motorists to exaggerate injuries and hence make fraudulent claims on their insurance.
The insurance companies are ultimately being forced to foot the bill for this, with this additional expense being recovered through both higher premiums and the omission of additional features. It is therefore unsurprising that insurers are attempting to offload the obligation to fork out for the legal bills of policy holders.
Don’t be caught out
Luckily the majority of price comparison websites will now highlight whether or not the common additional features such as breakdown cover and legal assistance are actually included. MoneySupermarket.com for example has separate tabs for each quote detailing whether or not the five following additional features are included in the package:
- Replacement windscreen
- Courtesy car
- Breakdown cover
- Personal accident cover
- Legal protection
This makes it easier for the customer to view the details of their policy so that they have a better idea of what they are buying before making a purchase decision. It also helps reduce the chance of a motorist being left with less cover than they believed they had when the worst case scenario occurs and they require legal assistance or breakdown assistance.
With a 10% price difference common between policy offers with and without these vital additional features, it is entirely dependant on the policy holder whether or not they believe this to be good value for money.