Rising insurance premiums can be an issue for many, and in this guide we offer useful information looking at why motor trade insurance premiums rise. Plus, we’re finding out how you can prevent rises, to try and help you save a little bit of money.
A common misconception is that claims are the only reason for increases in insurance premiums. In fact there are several reasons your motor trade insurance premium may rise. One of the most recent rises was in Insurance Premium Tax (IPT) which saw an increase in July 2015, when it rose from 6% to 9.5%. The latest increase came in March when it was announced IPT would rise again from October 2016 by half a percentage point.
Other rises may occur from fraudulent activity where insurers have had to pay large sums of money to compensate for false motor trade insurance applications, ghost broking and crash for cash scams. Fraudulent activity costs the UK insurance market more than £1 billion a year. One way of getting this money back is by raising insurance premiums.
A false motor trade policy application may be made to ensure vehicles appear on the Motor Insurance Database (MID) –which may then lead to lower premiums.
This is why when you take out motor trade insurance with Staveley Head we ask to see proof of trade.
Ghost broking is the name given to fraudsters selling false policies. These fake policies are not easy to spot as they’re designed to look real. There are a few things you can do to ensure your insurance policy is valid;
Crash for Cash scams are increasing the cost of motor insurance across the board from car insurance to motor trade insurance. This is when fraudsters purposely crash or make false claims for money. The IFB has created this list of crash for cash hot spots.
Can rising motor trade insurance premiums be prevented?
By trusting your judgement and being careful when on the road you can assist in keeping insurance premiums down. However unless insurance fraud decreases and less accidents occur insurance premiums will always fluctuate.
To report a fraudulent act you should contact CheatLine either over the phone 0800 422 0421 or online.