It feels like we are always facing premium increases for one reason or another. Usually a result of increased claims or natural disasters, but in other cases it’s the simple matter of claims costs increasing.

Earlier this year a JP Morgan Taylor Fry general insurance barometer was released which highlighted the expected increase in car insurance costs for 2018 to rise by another 5%, despite the number of lodged claims remaining pretty flat.

What’s the cause?

Well it’s all thanks to the technology in modern vehicles. Features like Reverse Sensors, Collision Detection, Autonomous Emergency Braking and headlights that now have aluminium surrounds and LED bulbs, are all very costly to repair/replace. The headlights in particular can be up to 50% more expensive than previous model vehicles with a more conventional set up.

A simple low speed collision can now cost thousands of dollars to repair due to the damage caused to the radar sensors in the bumper, let alone if the collision also involves a headlight.

Daytime running LED lights can cost over $1000 to replace, whilst some vehicles have headlights costing thousands to replace. When you consider the market value of these vehicles, you can image that it’s pretty easy to be reaching an uneconomical repair which would result in a total loss if the vehicle is involved in a more serious collision; especially if the airbag has been deployed.

So what does this mean for consumers? 

For many people the purchase of a new car can be quite a personal thing. We look for vehicles that will suit our lifestyle, but also our taste too. It’s common for us to consider maintenance costs like servicing and fuel consumption, but it’s also important to consider how much the insurance is going to cost too. Obtaining a quote when you’re in the process of deciding on a vehicle is worthwhile so that you can work that into your budget.  Insurance companies have tried to combat premium increases by increasing the excess payable in the event of a claim, but inevitably this hasn’t been sufficient and it therefore translates into premium increases too, especially for the vehicles renowned for high repair costs.  If you’re 30 years old or over, you can consider restricting cover on your policy to only people aged 30+ or alternatively choosing a Named Driver policy if there’s no more than 2 people driving the vehicle, both of which will help decrease your premium.

We can only hope that car manufacturers recognise these costs and consider how they can keep repair costs to a minimum when they produce new vehicles.