How Road Casualties Affect Car Insurance

The Department of Transport has published its National Statistics for road casualties in Great Britain during 2007 - and the results were promising showing that the number of people killed in road accidents fell by seven per cent from 3,172 in 2006 to 2,943 in 2007.

Of course even one road death is one too many, but any time the casualty rate falls we can see this as a positive - and potentially a nice boost for our wallets too, right? In theory, safer roads should mean lower car insurance premiums as the level of risk is reduced - but is this always the case?

The figures would suggest otherwise. Compared to the average from 1994-1998, there has been a 40 per cent reduction in the number of people killed or seriously injured as a result of road accidents. Furthermore, there has been a 50 per cent reduction in the number of children killed or seriously injured and a 10 per cent fall in the slight accident rate - that is the number of people slightly injured per 100 million vehicle kilometers.

Yet despite this, car insurance premiums are expected to rise by as much as seven per cent in 2008.

Why aren’t car insurance premiums falling?

Certainly safer roads could play a part in lower car insurance premiums, but the number of road deaths and injuries does not necessarily reflect the number of car insurance claims that are made.

There are a number of other risk factors to take into account. Firstly, there is vehicle crime which has been on the increase. The number of thefts of vehicles between April 2007 and April 2008 was up by 30 per cent compared to the same period during 2006-2007. Vandalism is also on the increase and despite numerous new security technologies being introduced it seems that criminals are becoming more sophisticated in their own techniques.

In addition, road casualties are not necessarily reflective of road accidents. For example, while no-one may be hurt if you bump into your neighbor's car on the way out of your driveway, a claim is still possible. As long as the number of claims continues to rise overall, then car insurance companies will continue to increase their premiums.

Furthermore, we can expect some hikes in premiums in line with inflation. Inflation leapt to 3.3 per cent in May 2008 - that’s 1.3 per cent above the Government’s two per cent inflation target. Just as we are feeling the pinch of rising mortgage rates, energy bills and fuel costs, car insurance companies too are being hit by increased overheads.

How can we drive down car insurance premiums?

The emphasis is firmly on the consumer to bring car insurance premiums down. One way to do this is by driving safely and steering clear of driving convictions. Two driving convictions increase premiums by an average of 60 per cent according to a price comparison website, so it clearly pays to drive maturely.

However, it’s not just about reducing our costs as an individual - we can help reduce premiums across the board. The more attention we pay behind the wheel and the fewer accidents we’re involved in, the lower the cost for car insurance providers. Fewer claims will mean fewer payouts - and this benefit should be passed on to consumers.

To pick up more direct rewards for driving safely, pick a car insurance provider with an established no-claims discount scheme. With some providers it is possible to save as much as 65 per cent with five or more years’ no-claims - offering you a financial incentive to stay accident free. Young drivers can benefit too as several insurers offer rapid bonus schemes allowing youngsters to earn a full year’s worth of no-claims bonus in a nine-month period to significantly slash their premiums.

Competition also drives premiums down. Become part of the ‘shop around’ generation and compare car insurance quotes online rather than accepting renewal policies to ensure you’re getting a competitive deal.

There are other steps to take too. Before moving home, examine the vehicle crime rates in the area - the better your postcode is perceived to be, the lower your car insurance premiums. Also look at the accident rates in the area and steer clear of busy accident hotspots.

Secure your vehicle with car alarms and immobilizers and by parking in a garage overnight - all of which can earn you discounts on your car insurance. However, the most important thing is to drive safely to protect ourselves and our wallets.