Owen Herring couldn’t find a company to insure his Vespa in May after Hastings refused to renew his cover.
The 82-year old retired BT manager from Whitstable in Kent has been into scooters since 1959. He had two Vespas, a PX150 and a GT60, and paid about £150 for third-party insurance on each. This covered fire, theft and damage he may have caused to other vehicles.
On May 25 Hastings sent a renewal quote of £178 for the GT60 but would not insure the other scooter. The firm said: “Factors can include the increased risk of a claim associated with your vehicle type or the increased risk of a claim in your area.”
Herring had to sell his beloved Vespa because he couldn’t find any other cover, despite asking local insurance brokers to help. “I think it’s an age thing,” he said. “I’m now worried that I won’t get insured on my car when it renews at Christmas or my other scooter next year.”
Hastings said Herring’s insurance for his Vespa PX150 had a maximum age limit of 83, so it could not offer him a renewal. The insurance for his GT60 was a different level of cover and had a maximum age limit of 87.
Many insurers are ditching riskier customers because of a rise in claims. Some 31 per cent of 2,023 drivers in a survey by the consumer site Compare the Market were not offered a renewal when their policy expired in the past year.
Mohammad Khan from the consultancy PwC UK, said: “A significant and sustained rise in supply chain costs for car repairs and personal injuries means some insurers have reviewed the risks they take on. This year many are tightening up their approach to issuing policies.”
You normally get a renewal quote 21 to 30 days before your cover ends which tells you what you paid a year ago and what the new cost will be, usually a higher amount.
The average fully comprehensive car policy was £622 in the second quarter of this year, according to the Association of British Insurers (ABI), a trade body, up 21 per cent on the same period a year ago.
James Daley from the consumer group Fairer Finance said it was “definitely plausible” that drivers were being declined a renewal more often, with insurers having a lower appetite for risk. “They could be trying to cherry pick the most profitable customers and avoid the ones most likely to cost them.”
The most common reasons customers were not offered a renewal, according to Compare the Market’s survey, were an increase in car accidents or thefts in their area or a rise in thefts of their type of car.
There has been a rise in the cost of car parts and labour, replacement cars and personal injury claims. The ABI said the average claim payout was up 39 per cent from £3,414 in 2019 to £4,760
• New young drivers pay £1,000 more for insurance
in the first half of the year. The consultancy EY said that last year was the worst for motor insurers since 2011 because of the higher cost of claims. The amount paid out was 112.8 per cent of what they took in premiums, it said. This is up from 111.1 per cent in 2022. It is the second year in a row that motor insurers have suffered losses.
Rising costs for insurers typically lead to higher premiums for drivers but sometimes a price increase is not enough.
Ian Hughes from the market researcher Consumer Intelligence said: “Insurance companies must consistently analyse their claims data and make informed adjustments to their risk appetite. “This process naturally leads to some drivers being re-rated, resulting in higher or lower premiums, or affecting whether they are covered at all. However, this isn’t something that should be taken lightly or done arbitrarily.”
‘I asked my insurer to beat a competitor and then it said it wouldn’t cover me at all’
When Loc Bui called his car insurer to ask if it would match a cheaper deal, he was refused any kind of insurance altogether.
The insurance firm Dial Direct had sent Bui, from Addingham in West Yorkshire, a renewal quote of £349 for his 2009 BMW 1 Series before his policy was due to end on July 27. Bui, who works as a chef, checked a comparison site and was hopeful of getting a better deal because his annual mileage had dropped from about 16,000 miles to 2,500 miles after he changed jobs.
The cheapest quote was £250 from Hastings Direct. After updating his details with Dial Direct and asking it to match the deal, he was told that the insurer would no longer cover him. “There was no reason,” Bui, 49, said. “Surely I’m now at a lower risk of being involved in an accident? That seems a win-win for an insurer.”
Dial Direct said it could not offer Bui a renewal quote when he called because of a “system issue” with its underwriter. It said it found another underwriter to offer him a renewal, but he had found a quote elsewhere by that time.
It also said it had no choice but to cancel his policy because it did not have up-to-date details of his mileage. Bui said he was never offered another quote from Dial Direct.
Owners of high-powered SUVs like Range Rovers have also been finding it tougher to get cover. Premiums, where they are offered, can run to tens of thousands of pounds because of high thefts, insurers say.
But there are signs that things may be starting to improve. The ABI said the average motor payout increased just 0.5 per cent between the first and second quarters of this year, while the average fully comprehensive car premium fell 2 per cent — although it is still much higher than a year ago. EY also said motor insurers are likely to return to profitability this year.
The ABI said: “While insurers regularly review their risk appetite, the motor insurance market remains competitive. Cover is available from a wide range of providers, with a variety of products to meet people’s needs.”
If you are struggling to find cover, try the Find Insurance service from the British Insurance Brokers’ Association on 03709 501970, which can help you to find a broker.
