Election 2024: How do Labour and Liberal Democrats plan to tackle car insurance costs?

If the proposed solution is to put pressure on the FCA to investigate insurance companies, it won’t resolve the true challenges that insurance companies are facing which result in increased costs.

If insurance companies are supported to find ways to lower repair costs, like agreeing on cheaper parts prices, or road safety is continued to be invested in to limit the number of accidents and claims, this is a better approach to tackling insurance costs than simply relying on regulation.

While rules are essential to keep insurance companies in line, there are other ways to help make insurance cheaper for everyone.

The Lib Dems car insurance price probe promise appears to mirror what Labour are pledging too. They also mention an investigation into the high cost of fuel – which will benefit all drivers.

For those who live in rural areas, they could benefit by further fuel price reductions by ‘expanding Rural Fuel Duty Relief.’

2. ‘Postcode pricing of premiums unfairly targets those who live in poorer areas’

Labour’s Louise Haigh made a statement about ‘postcode pricing’ of premiums unfairly targeting those in poorer areas.

This isn’t a targeted action against residents of poorer areas, but a reflection of the risks associated with those regions.

Postcode pricing in insurance is based on statistical data reflecting the likelihood of an insurance claim within the area – based on historic claims data. Regions with higher rates of accidents, thefts or claims naturally have higher premiums because the risk to the insurer is greater.

Prohibiting insurers from using postcode as a factor could have unintended consequences. For instance, it might lead to insurers withdrawing from markets they perceive as too risky without being able to charge premiums that reflect that risk, potentially reducing the availability of insurance in areas where it’s most needed.

Removing the ability to price according to risk could lead to a blanket increase in premiums for everyone, regardless of where they live or their personal driving records.

Addressing the concerns about fairness in car insurance premiums requires other measures such as enhancing road safety in high-risk areas and supporting initiatives that lower crime rate and thus insurance claims.

These efforts can help limit the factors that lead to higher premiums, offering a more comprehensive solution than merely adjusting how premiums are calculated.

So, what could this mean for you?

Ensuring specialist & classic car insurance remains affordable for drivers is crucial.

While Labour and the Liberal Democrats have outlined their intentions to address rising car insurance costs, it’s crucial to consider the complexities of the insurance industry.

As an insurance brokerage equally passionate about classic cars, we understand the importance of providing insurance premiums that reflect the actual risks and values, not inflated figures that disadvantage car enthusiasts.

We observe the pledges made by these parties, and we remain politically neutral, focusing solely on how these policies could benefit our clients. We hope that whichever elected party will support insurance companies to minimise costs so premiums remain fair.

We hope that whichever party forms the next government will work collaboratively with insurance companies to address the root causes of rising premiums. This could include supporting initiatives to reduce repair costs and investing in road safety measures to reduce accidents and claims.

In the meantime, we remain committed to providing our clients and prospects with insurance to suit their needs. If you’re looking to speak to classic car insurance specialists with over 55 years’ experience, feel free to get in touch with our friendly team.

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Disclaimer: This article is provided for information purposes only and is not intended to influence any political decisions or preferences, nor do we have any political affiliations. The content outlines potential impacts based on the publicised manifesto and intentions pledges of various parties ahead of the 2024 General Election.

*Please note that we do not endorse or oppose any political party. The analyses and summaries provided in our content are intended to inform and assist our clients in understanding how various political party policies might impact their insurance needs and decisions. Our goal is to help you make the most informed decisions about your insurance coverage, regardless of political context.