Understanding why your car insurance premiums are increasing
Car insurance can be confusing at the best of times. With motor premiums set to rise even more this year, we thought we’d pull together a list to help you understand just why it’s costing more to insure your vehicle. So what’s driving up the cost of car insurance?
Below are our top reasons your premium costs are increasing. This is resulting in an increase number of vehicle claims insurers are receiving, and an increase in the average cost per claim.
Here’s why your car insurance premiums are going up
- Population increase bringing more vehicles on our roads
Urban migration is leading to higher density on our roads, especially in Auckland, where 43,000 more people moving to Auckland and 40,000 more cars on the roads in the past 12 months. IAG portfolio manager Judith Harvey confirmed this last year. Stating that “higher traffic densities mean greater exposure to factors leading to damage” – resulting in a higher number of claims.
- Cars are newer and more affordable than ever
Along with many more vehicles on the roads, the chances are these vehicles are likely to be newer models. The cost of buying a vehicle now is no more than it did ten years ago Last year, the NZTA reported that every week, 800 new vehicles are registered in Auckland. In fact, imports worth $86 million more than in June 2016 equating to 2566 more cars, and according to Stats NZ, car imports topped half-a-billion dollars for the first time in June.
- Better technology makes for more costly parts
Parts are more expensive as the frequency of crashes involving newer cars increases. Later model cars mean that there are higher prices to get repaired, with advances in sensor technology. While once many believed it was European cars, it’s thought within a year or so all new cars would come with anti-collision technology.
- Collisions are becoming more expensive to repair
Newer vehicles mean that cars now come with advances in technology, meaning that small mistakes can cause big headaches. According to the Insurance Council’s vehicle expert, higher repair prices are due to more late model cars with sensor technology being on the roads. Twenty years ago a wing mirror could cost $70 or $80 to fix but now it could be several thousand dollars depending if it had sensors, cameras or a computer inside it. Ironically, safety technology is making cars more expensive to fix when they do crash.
- Repairs require more skilled repair technicians
A minor crash could now cost thousands of dollars thanks to the time-consuming process and costs of parts. A shortage of skilled technicians and labour. Neil Pritchard, general manager of the Collision Repair Association, said the industry did have a skills shortage which was almost at “crisis levels”
Got questions about Car Insurance changes?
We’re here to help.
You’re probably aware that the price you pay in your car insurance premium is often down to individual circumstances that are specific to you. For example, your age; driving history; type of vehicle and location. As these factors change so does the amount you pay for your car insurance. With the increased frequency of claims and rising costs of repair, insurers have no option but to respond by increasing premium prices.
If the thought of your car insurance going up makes it tempting forego insurance altogether, don’t cancel your policy just yet! Insurers are reassuring car owners they won’t be in for a large spike. Premium changes are being introduced incrementally, and they’re also exploring ways to help improve the range of services available and reduce overall risk. Introducing new repairs sites and crash management services are a great example of this.
When it comes to choosing the right car insurance, getting the balance between the cost you pay and the cover you get has never been more important. Whether you’re insuring your vehicle for leisure or have your entire business fleet to consider, get advice on the best option for you. Just remember your decision shouldn’t be guided by price alone!
That’s because there could be a significant difference in what you get for what you pay. Your choice of insurance could mean the difference between a smooth and simple recovery, or a more time-consuming event. Make sure you’re covered with a service that’ll take out the hassle of a crash, and get your family or business on the road again.
Could Our Crash Management Service Be for you?
For us here at Balance, it’s important that we can guarantee your quick recovery, whatever the situation you find yourself in. That’s why we’ve negotiated a unique service that keeps you on the road and in the loop in the event of any vehicle accident claim. Crash Management is a unique automotive collision repair service that keeps you on the road and in the loop in the event of any vehicle accident claim.
This facility is free of charge for Balance car insurance clients and delivers a one-call solution, from the point of impact through to the day of re-delivery. We highly recommend Crash Management as a one-stop service which comes to you with keys for a loan car as soon as possible after you have had a vehicle mishap.
For more information get in touch with us today. We’ll make sure you have the right level of cover for your vehicle risks.