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May 28, 2019

Cars equipped with modern technologies make insurance costly, says ABI

Cars equipped with modern technologies are forcing the British insurers to pay more claims for repairing and in-case of theft of the car which in turns driving up insurance premiums; reveals a report by the Association of British Insurers (ABI).

The report revealed that the cost of vehicle repairs during the first quarter of this year touched to £1.2bn. It is said to be the highest quarterly figure since the ABI started collecting the data in 2013.

Ever more sophisticated vehicle design and use of ultra-modern technologies are driving up the repair bills as they costs more to repair when damaged.

Standard car spare parts including headlights and windscreens are also becoming more expensive. The cost of a headlamp on one popular vehicle has increased by more than 400%, from £163 for the 2012-17 model of the car, to £840 for the most recent model.

Motor Theft Claims: Making Car Insurance Premiums Expensive

According to ABI, the number of motor theft claims paid by insurers in the first quarter of this year was at their highest for any quarter since 2012, with a payment made to a car crime victim every eight minutes. The cost of these claims surged by more than 20% on the same period last year.

The ABI data indicates that insurance firms settled 16,000 claims for the theft of or from a vehicle, which was up from the 14,000 for the same period last year, to the highest quarterly figure since 2012.

The cost of theft payouts stood at £108m, up 22% on the same period last year. It means over £1.2m ($1.5m) paid to policyholders every day. The overall cost of motor theft claims has doubled over the last four years.

ABI motor insurance policy adviser Laurenz Gerger said: “The continued growth in car crime must be reversed. Car security has come on leaps and bounds but needs to keep pace with the ingenuity of car criminals.

“The rising number of theft claims being paid by insurers in part reflects the vulnerability of some cars to keyless relay theft.

“Action by motor manufacturers to tackle this high-tech vulnerability, allied with owners taking some simple, inexpensive precautions will help put the brakes on this unwelcome trend.”

The ABI has recommended three steps to reduce the risk of keyless car thefts, which includes parking car in a well-lit area, keep car keys well away from external doors or windows, and turn off the signal overnight or keep the keys in a signal-block pouch.

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