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How Rising Motor Costs Will Affect You & Your Premiums
Daniel Floyd • Oct 21, 2022
The recent years have arguably been the toughest in the High Net Worth motor insurance industry. The global pandemic, war in Ukraine and rising inflation has put huge strains and pressures on manufacturing and insurers alike. As a result, delays in producing new vehicles are at an all time high and the cost of EV, HEV & ICE vehicles have skyrocketed and caused a chain reaction down the 2nd hand market. Car Dealer Magazine has suggested in 2021 the average 2nd hand car price rose by 30% compared to before the pandemic! This has also had a knock on effect in the other sectors of the insurance industry. Courtesy cars are extremely limited, replacement parts from the EU are taking far longer than usual and since an influx of EV and HEV vehicles on our roads, the availability for garages who can deal with these vehicles is limited.
So, what does this mean for the insurance industry and most importantly, our valued clients. Well unfortunately with any increase in an insured peril, premiums generally start to creep up. The good news off the back of this is that motor insurance premiums in 2020 & 2021 were the lowest in many years as a result of lack of driving during the pandemic, so any increases are bringing premiums inline with 2018/2019. For the first time in my 8 years of insurance broking I’m having to increase clients market values rather than decreasing!
Of course there is good news and there is light at the end of this tunnel. At Saxon Insurance Brokers we have spent many years building relationships with our trusted underwriters to ensure every product we offer is fit for the purpose, which helps our clients reach their insurance related goals.
What we have seen recently are a high number of what I call ‘First Time’ clients using a Private Client broker. This isn’t necessarily because of their wealth changing but more to do with the value of their cars, having gone up, falling in to a different sector of the market. No longer are Admiral or Direct Line able to insure a new Mercedes G63 AMG because the value when new is now more like £190,000 than £150,000, which was just about doable for internet insurers.
The great news is as a result of our relationships, premiums are incredibly competitive but most importantly, cover and products are the best in the market. Naturally our goal isn’t to insure a single car when they have multiple high value cars and likely a high value home so these are perfect opportunities for us to help the client with their asset portfolio wrapping it up with one insurer and one renewal date, if nothing else, that is a whole lot of admin saved.
If this sounds like you, contemplating whether to trade in your most recent lease vehicle or are generally concerned about the rising insurance costs and covers as a result of the cost of living, please give me a call and we can have a chat. I pride myself on helping clients achieve their insurance-based goals and ensure they are fully protected against the risks faced. Remember when you buy cheap, you buy twice!
Daniel Floyd
Client Manager
M: +44 (0) 203 384 0303
W: saxoninsurancebrokers.com
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