car insurance low deposit

It is the car insurance industry under threat?

As we contemplate the cost of renewing our car insurance, which has gone up in price by a frightening amount over the last two years, it may be hard to appreciate the fact that insurance companies are in trouble. Despite the fact that there premium income is rising higher and higher it is still, in many cases, being exceeded by the cost of claims and other overheads. Many insurers are faced with the unpalatable choice of either increasing their premiums are facing severe liquidity crises.

It is not as if simply putting prices up is all that easy, because the Internet is a very vocal medium. Whereas once upon a time price increases could be slipped in quietly without anyone really noticing, nowadays it could be spread all over Internet forums within a matter of hours. Insurance companies are between a rock and a hard place; they'll have severe problems if they increase their prices unilaterally, and they will have severe problems if they do not. Any concerted effort between them to agree overall increases would constitute a criminal offence; so what do they do?

The answer is; they make it as easy as possible for motorists to buy their products and one way of doing this is offering so-called 'no deposit' car insurance policies. These are exactly the same as conventional policies, the only difference is that payments are made monthly instead of full payment being made in advance. This may well seem like a simple thing to do but that is completely incorrect; legally an insurance policy requires a deposit in order to become a legal instrument; but the insurers are claiming that there is is a no deposit system. How can this be? Well, a little verbal sleight of hand has been used; the deposit is in fact paid by the buyers credit card company, and the buyer only has to repay this when the credit card bill is due. Is this a true 'no deposit' system? It would be very interesting to hear a barrister argue the point in the High Court.

It is perhaps a sad reflection upon the times that we live in that 'easy pay' systems like this are so universally popular; fair enough, there are a great number of people who simply cannot afford to lash out a huge sum, often in four figures, for the car insurance but is a car really all that essential in the 21st-century? Proponents of the car will argue that public transport can be dirty, dangerous and inconvenient and in many cases this is a fair comment. There are also a lot of people whose physical disabilities mean that the only way that they can get about is by car and taking this away from them could cause them considerable hardship. It is however undeniable that the disruption to the infrastructure of our country in order to cater to the motor car has been great, and the expense enormous. We are held to ransom by oil-producing countries to provide the petrol that we burn in our vehicles, and our chancellor of the exchequer greedily feeds upon the tax revenues which are extorted from the ever suffering motoring public. Perhaps we need to see car insurance prices going up even further to a level where even monthly repayments become too expensive for the average person to pay, and then the resultant decrease in the numbers of motorists on the road could cause a rethink in transport policies. This is something which is being completely overdue since the road building frenzy of the 1960s and 1970s laid the foundations for our great temples to the motor vehicle.