Hancock attacks car insurance costs
Published 26/06/2015 | 04:31
Car insurers are being pressed to do more to justify large renewal hikes for older drivers after actress Sheila Hancock complained that her premium leapt by an "absurd" £1,373 in the space of a year.
The 82-year-old was shocked when her insurance company said she would have to pay £2,246.79, up from £873.29 last year to insure the Mini Cooper she bought in 2012.
Hancock, who contacted the Guardian, wrote to Admiral Insurance to protest against the massive hike in her premium explaining that she had not made any claims in more than six decades on the roads.
Richard Lloyd, executive director of consumer group Which?, said: "Car insurance premiums for some older age people seem completely disproportionate to the risk they pose.
"We think insurers should do much more to justify these higher costs and be up-front when they send out renewal notices, with a clear explanation of price increases."
The actress, who lives in London, was involved in an accident in 2013 but she was not at fault, and her car was scraped while driving in 2014, but she did not claim in either case, the Guardian reported.
A spokesman for Admiral insisted that the price hike was not due to Hancock's age.
He said: " We are sorry we couldn't help Ms Hancock with her renewal. The increase in her renewal premium was not due to her age or occupation.
"It is not in our interest to overcharge our customer, as we would lose profitable business. We want to be able to provide fair and reasonable premiums for all customers who come to us for a quote and we are sorry we can't always be competitive for everyone."
Admiral looks at more than 50 rating factors when calculating a premium, with non-fault claims being one of these factors.
According to a car insurance index run by AA Insurance, the average quote in the first quarter of 2015 for a driver aged 70-plus who shopped around was £387.07. The average quote for someone aged between 60 and 69 years old who shopped around was £305.19.
Ian Crowder, a spokesman for AA Insurance, said: "For older drivers of Sheila Hancock's age and above, fewer and fewer insurers are willing to offer cover and thus there isn't the same competition ...
"For an 80-year-old a premium of £600 or so is not uncommon and no-fault collisions will contribute to a premium."
Hancock, who reinvented herself in recent years as a best-selling author, musical star and TV talent show judge, told the Guardian: "What is going to happen with the ageing population?
"If I was stuck in the country and couldn't afford my insurance - and a lot of people couldn't - what do you do? It's absurd."
She continued: "If you look for insurance over the age of 80 there are hardly any companies which will even touch it, yet I would be pretty sure that if you look at the statistics there are far fewer accidents with older people than there are with butch 30-year-olds who work in the City."
The widow, whose husband Inspector Morse star John Thaw died in 2002, said there should be independently adjudicated tests for drivers aged over 80 to show competence.
She has since taken out an insurance policy with Cornmarket Insurance for £1,073.83, the newspaper reported.
A spokesman for the Association of British Insurers (ABI) said statistics show that drivers who have an accident which is not their fault are more likely to go on to make a claim.
He said: "Industry data shows that policyholders who have had a no fault accident are 40% more likely to make a claim in the future. So some insurers will consider this when setting the price for customers.
"This is just one factor that insurers take into account when calculating a customer's motor insurance premium and, as always, people should shop around to find the best deal. "
Kevin Pratt, an insurance expert at website MoneySuperMarket, said that in general people aged under 25 pay higher premiums because they are statistically more likely to be involved in an accident - and many accidents involving young people are expensive.
By the time a driver reaches their late 20s, insurers tend to see them as more experienced, he said. But when someone reaches their 70s or 80s, their premiums may start to increase again, he said, adding that some older people may suffer health problems such as with their sight or hearing.
He recommended that drivers of all ages should shop around a month before their premium is due to end, rather than just a few days beforehand.
Mr Pratt said: "Insurers often increase their prices the closer they get to a renewal date. They know you are keen to buy your policy."
He said the good news is that firms are recognising the fact that people tend to be living healthier lives for longer as the population ages, adding that they are also increasing the age limits on products such as travel insurance and mortgages.
Mr Pratt said: "An 80-year-old today is probably healthier than someone who was 80 10 or 20 years ago."
Caroline Abrahams, Age UK's charity director said: "Age should not be used as a proxy for risk when it comes to deciding how much someone should pay in car insurance.
"For too long insurers have relied on date of birth not individual risk and record to determine the cost of driving for older people."