Can more accidents and higher repair costs drive my motor insurance premiums up?

The premiums paid to motor insurers are used to pay for the damage and losses that result when an accident takes place. Insurers have to make sure the money they collect is sufficient to meet their expenses. When their costs go up, premiums must also rise.

It’s plain to see there has been an increase in the number of cars on the road, so it follows that more accidents will occur. But as long as the number of accidents per thousand cars does not increase and the average cost of an individual accident does not go up, the cost of insurance does not rise. The extra cars contribute enough additional money to pay for the larger number of claims.

Unfortunately, the influx of cars has lead to increasingly crowded roads and an escalation in the number of accidents per thousand cars, with a resulting increase in costs to insurers.

Further, cars built today are more complicated than those built five or ten years ago, and are more difficult and expensive to repair. And medical technologies have improved so people who would have died from injuries now happily recover, but these better services have a price.

Through its efforts to improve road conditions, government has shown its intention to reduce traffic congestion. But until these improvements are made, drivers need to be alert and drive defensively, both to safeguard their lives and property and to help keep motor insurance rates down.

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