MN190 wrote:
How does the insurance price compare with the £1200 a year I was paying in the early nineties
I was in my 20's but a combination of no NCD for a car and living in a higher than average crime area. The car was a 1986 Ford Orion 1.6i Ghia.
I managed to lose my NCD when my previous car was stolen and written off.
Just to put it into context my mortgage at that time was £300 per month
Trying to put things into context is virtually impossible with so many factors to play with. The whole nature of insurance, other than the underlying principles, has changed, especially the marketing of it.
The advent of on-line business practice, the failures of High Street broking firms unable to compete due to inexorably rising costs of commercial premises, and a myriad of legal requirements before you can trade in absolutely anything have all had effect. Taken together with several major insurance companies being absorbed by predatory syndicates that were only after their client base, it’s not surprising that the business has become vicious.
However, the details you give prompt at least one thought. The mortgage you quote at £300 per month was a fraction of the risk to the lender compared to motor insurance. Largely because they had a First Charge on the property, usually for less than the property was worth on the trade auction market. The lender was on a dead cert if you had defaulted on the loan because even if repossessed and auctioned they would have come out on top, all they had to get back was their outstanding mortgage. And even that was, wait for it, insured by what’s called reinsurance! So the difference in costs reflect the risk.
In the nineties mortgage rates were higher than now but the rise in property values (and, as we all know, motor insurance claims) dictate the need for higher mortgages, making repayments on average 5 times as much. There’s no escape - only inheritance is free - if you know how to minimise the tax liability! It’s not difficult to do, just needs planning - and Inheritance Tax is after all entirely voluntary!
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