The final stage of unlocking is just around the corner. But more socialising and freer travel will also bring more road accidents and burglaries. Lockdowns have been a boon for the insurance industry. Motor insurers enjoyed a windfall last year as empty roads saw claims plummet.
They have even been passing some of those savings onto drivers: Compare the Market reports that the average car-insurance premium fell to £629 between April and June this year. That is the lowest quarterly level since 2015 and £126 cheaper than before the first lockdown.
Yet the era of falling premiums “is about to come to a screeching halt”, says Emma Dunkley in The Mail on Sunday. Claudio Gienal, the boss of insurer AXA UK, says traffic levels are already back to pre-pandemic levels. “He predicts the number of cars on the road is going to accelerate rapidly” after 19 July.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Meanwhile, Churchill Home Insurance says that there were 100,000 fewer reported UK burglaries in 2020, a 27% fall, as people were trapped at home. Nonetheless, the average cost of home cover rose by 5% last year to £177.29, reports Compare the Market. The industry says that “although we may no longer be being robbed… we are breaking or setting fire to more things”, says David Byers in The Sunday Times. It’s a dubious excuse.
As James Daley of Fairer Finance points out, “accidental damage is not included as standard in most home-insurance policies”. Using the rise in self-inflicted combustion to justify baseline premium hikes looks unreasonable.
Burglaries will bounce
These are hard times for criminals. Ed Magnus on This is Money reports that the average burglar is thought to have lost £12,954 last year as robbing and thieving became less lucrative. A “burglary bounce” is expected as we spend more time out of doors, so it’s time to “turn your home into a fortress”.
Install reliable door locks – “cylinder locks”, commonly found on UPVC doors, can be snapped in seconds. Basic Yale locks are also not much of a challenge for a thief. New property owners should change all the locks: you have no idea how many keys are in circulation for the current ones. Think about putting a few lights on a timer if you are going away, and don’t post your holiday snaps on social media until you get back home.
New technology offers extra ways to keep your house safe, says Colin Baker in The Sunday Times. A keyless door lock is not too expensive and will convince opportunists that “you’ve got the place wired like Nasa”. Video doorbells are even better. When someone rings, a smartphone app alerts you and begins to record: “You can talk to the caller as though you’re just busy out the back or upstairs, no matter where you are in the world”.
There are downsides to being too tech-heavy, though, says James Max in the Financial Times, who was burgled last year. Remembering “all the codes and keeping track of the keys and fobs” can be a “kerfuffle”.
Electric security gates are said to add 5% to a property’s value, yet “they have been nothing but trouble. The remotes use batteries that are impossible to find in most high-street shops… And you will need a PhD in computer science if you want to ‘pair’ them with your car”. A slug found its way into the circuit board, frazzling both itself and the gates.
-
IMF suggests “refinements” to Rachel Reeves’s fiscal rulesThe IMF has upgraded the UK’s growth forecast but wants Reeves to refine her fiscal rules to avoid unnecessary spending cuts or tax rises
-
Invest like a tortoise, not a hare to avoid market volatilityOpinion Hassan Raza, Portfolio Manager at CG Asset Management, highlights three favourite investment companies
-
How to invest in the booming insurance marketThe insurance sector is experiencing rapid growth after years of stagnation. Smart investors should buy in now, says Rupert Hargreaves
-
A new wealth tax is a terrible idea. The rich are already being hit by sneaky taxes – Merryn Somerset WebbOpinion Ideologues want to squeeze more tax out of the rich with a wealth tax. They’re already wrung dry, says Merryn Somerset Webb
-
What MoneyWeek writers read and watched in 2024Here's a roundup of MoneyWeek's favourite books, films and TV shows in 2024
-
Parents face £1,000 'nanny tax' – how to afford itHiring a nanny is about to become even more of an expensive hassle for families, especially those in London. Here's how to cut costs
-
Lock in an 11% yield with SabreTips Sabre, a best-in-class company is undervalued due to low profits in the motor insurance industry. Should you invest?
-
Is it cheaper to be a sole trader?It might be cheaper to be a sole trader due to changes to the tax system
-
Are insurance companies a good investment?Costs may be soaring but the insurance sector is currently going through one of its most profitable periods. The market has been slow to realise the opportunity here
-
The best fintech apps on the marketFrom digital banking to investment platforms, here are the top fintech apps on the market right now, according to David C. Stevenson
