Insurance companies are omitting elements of their car insurance packages which previously came as standard in an attempt to reduce expenditure. This is leading to the removal of essential features for anyone planning on taking their vehicles into European countries, with European breakdown cover and European car insurance cover commonly being removed. This is being done without being highlighted to motorists in their renewals, with MoneySupermarket.com claiming that it is now more important than ever before to check the small print of a policy before agreeing to a deal.
This comes on the back of a year of turmoil within the insurance industry, with an increase in the number of fraudulent claims being made leading to the average driver paying 40% more for car insurance than in 2010. It is believed that this is also the reason for the omission of these additional features, as insures desperately attempt to cut costs in an attempt to combat the effects of their increasing legal fees which stems from these fraudulent claims.
We therefore take a look at the things that European road going travellers need to look out for and possible cost saving measures that can be taken in order to make travelling abroad more affordable.
Reasons for the change
The AA’s Simon Douglas is blaming changes in the insurance industry on the “fast growing black market” for personal injury claim lawyers.
This is backed up by Greaeme Trudgill from the British Insurance Brokers Association (BIBA) who claims that the personal injury claim lawyers are encouraging people to make claims for even minor injuries by adopting increasingly aggressive marketing techniques such as text messages and emails: “We’ve seen a massive increase in the number of personal injury claims made on the insurance industry. Over 400,000 whiplash claims a year, it’s actually a tripling in the amount of claims that we’ve seen for bodily injury.”
“So what we’re getting is claims management companies now, they’re texting people, they’re using aggressive marketing techniques to try to encourage people to make a claim. Their advertising’s not illegal, but if you actually go ahead and claim when you weren’t injured then that almost definitely is illegal.”
The number of personal injury claims being made has increased by 70% in the past decade according to the BBC. It is believed that the massive increase in legal fees resulting from this which insurers are forced to cover is responsible for the rise in premiums and decrease in the number of additional features included in insurance policies.
Things to look out for
Everything that is provided by your insurance cover will be noted in the policy documents. If it isn’t featured, then it probably isn’t included.
This has made it easy for insurer to quietly remove additional features on their policies which used to come as standard in any renewals which are offered to customers. All of this vindicates MoneySupermarket.com’s statement that insurance customers should always read the small print on a policy before agreeing to it. Additionally, if there is anything which insurance customers are unsure about, they can always phone up their insurance provider in order to check on whether or not a particular feature is included.
Features affecting European travellers which are commonly omitted tend to be European breakdown cover and even European car insurance cover. Previously, most car insurance providers offered protection for up to 21 days on these two features. However, they have now both been sacrificed by the vast majority of insurers who are keen to reduce expenditure.
It should be noted that car insurance is not the only type of cover to be effected, with travel insurance policies also set to rise by at least 10% according to Axa. Travel insurance customers should therefore also be careful to watch out for any additional features on their policies which may have been removed when an insurance renewal is offered.
Reduce your own travel related expenditure
There is no way to avoid price increases, but there are things that can be done to limit the damage:
European Car insurance
Opt for a car which has been classified into the lowest insurance group possible. This will lower the statistical likelihood of an accident occurring in the eyes of insurers, hence resulting in cheaper car insurance premiums being offered. Additionally, avoid making performance enhancing modifications to your vehicle.
Security – However, not all modifications will be a bad thing. Making security enhancing modifications to your vehicle will reduce the statistical likelihood of your vehicle being stolen, and hence will attract cheaper car insurance quotes as the insurers will realise that it is less likely that they will be forced pay for a claim.
European Breakdown cover
Haggle – Don’t just accept the first European breakdown cover offer you are quoted by the provider. Phone up the company and tell them about cheaper deals you have been offered by their competitors. Chances are that you will get some kind of special offer, particularly if you are negotiating a renewal.
Vehicle or personal – Breakdown cover providers will offer both vehicle specific and personal breakdown cover packages. Personal cover guarantees to attend to the breakdown of a specific individual, regardless of what vehicle they are in. Meanwhile, vehicle specific breakdown cover agrees to attend to a specific vehicle, regardless of who is driving it, but won’t attend to the owner if they breakdown while driving another vehicle. Vehicle specific tends to the cheapest option, but which one works out as the most cost effective will of course depend on your specific situation.
Single or multi trip – Don’t assume that it will be more cost effective to opt for a multi-trip policy rather than a single trip, as there are now a number of single trip travel insurance offers available at a much cheaper rate than what is available for multi-trip policies. However, what ever is the most effective will obviously depend on your circumstances.
Shop around – Comparing deals available through every travel insurance provider would be incredibly time consuming. You will save yourself both time and possibly money by utilising a travel insurance price comparison website which will compare deals available through a large number of insurers in a matter of minutes.