Insurance premiums are increasing due to a number of factors including: continued weather events and natural disasters; rising costs for materials and repairs; compliance costs; frequency and severity of claims; and increases to the Fire Service Levies and Earthquake Commission Levies.
We are seeing many vehicles on our roads that have advanced technology and smart parts, such as built in sensors, cameras and computer equipment. Advanced technology means there is an element of complexity involved when making repairs. The parts are expensive to replace and repair, and this is another factor taken into account when calculating motor premiums.
Many repairers now require specialised equipment and because of the new safety standards, damage may no longer fit into a repair category, or if it does, it comes with a requirement to upgrade the repair to meet safety standards.
With more cars on our roads - last year there were 43,000 more cars on Auckland roads alone - the frequency and severity of claims is also on the rise.
Premium increases are not just localised to New Zealand, they’re happening in Australia, the United States and the United Kingdom. The Association of British Insurers in the United Kingdom, says the average cost of a motor insurance claim has risen to the highest level on record.
Increases will not be limited to motor vehicles either. Home insurance premiums are also being driven up. Costs are being impacted by increasing rebuilding costs, building material and labour costs, and compliance costs necessary to meet the new safety regulations.
Over the next year the majority of Kiwis will see an increase in their premiums so talk to your broker about some of the things you can do to help keep costs down.