Why a million fail to report a prang
MOre than one million people are driving damaged cars because they are scared of being hit with a steep premium hike if they report a prang to their insurer.
Drivers have become desperate to keep insurers in the dark about accidents, so are i ncreasingly paying for repairs themselves or failing to get them fixed at all.
Figures from car cover specialists Accident exchange show the extent to which drivers are worried about the serious financial consequences of being involved in a shunt — even if it was not their fault. thousands have been hit with sharp rises in their premiums after telling thei r insurer about a crash.
For a driver with a £500 excess suffering damage caused by a parking bump or l ower- speed accident, it is often cheaper to pay for the claim out of their own pocket rather than pay t he excess and face a bigger bill from their insurer.
even when the car has not needed repairing or t he driver was blameless — sometimes not even being in the vehicle at the time — they have been hit with cost increases when their policy comes up for renewal. insurers can justify this because they will claim you have suddenly become a much higher risk, even i f you have decades of incident-free driving.
Car cover premiums have risen by 30 pc in the past three years. the cost of policies bought through comparison sites — which make up a significant number of all motor insurance policies sold — rose by nearly 5 pc last year, reaching an average of £1,180 for comprehensive policies, according to the AA.
Money Mail has been bombarded with calls from angry readers who have f allen victim to soaring premiums and have been lumbered with huge excesses after reporting an accident that was not their fault. So steep are some of the premium hikes that worried drivers opt to cover the one-off cost of the repair themselves, or simply don’t get it fixed, rather than face years of sky-high insurance bills.
Next month, new rules will limit the amount that no-win, no-fee lawyers can bill insurers for their client’s costs — even when they win a case. typically, these can be up to £1,300 a time and insurers argue they have no choice but to bump up premiums as a result.
it is thought this new law will save insurers £1.3 billion a year. But drivers might only see around £24 knocked off their premiums.
On top of this, government officials are due to meet with motor insurers next week to discuss how to further slash the cost of car cover. But motorists are still complaining of being hit by rip-off tactics to make them pay more. the Financial Ombudsman Service expects another huge surge in grievances this year — following a 26 pc jump to 7,264 in 2012.
Many readers claim they have been hit by soaring fees simply for renewing, cancelling or changing a policy.
For example, the average charge to set up a policy has jumped from £13.25 in 2008 to £27.98 in January this year, according to figures from data firm Defaqto. And fees for cancelling your insurance have soared from £34.14 to £43.44.
A spokesman for the Association Of British insurers says: ‘We have to wait for the legal changes to bed down before we see changes in the cost of insurance.’