I have been advised by my insurance that the premium for the vehicle has gone up, even though the vehicle has depreciated. They claim it is due to the increase in cost of motor spares, etc. How valid is this increase and can I refuse it?
It depends what the increase in premium was. If you had no claims and had a good payment profile during the year – you should look at an inflationary based increase. What your Insurer explained to you with regards to the replacement value of parts is correct. Insurers have no control over this price. This, together with the labour rates from panel-beaters (which need to be manufacturer approved) is the two biggest contributors to claims cost.
Also – between 60 – 70% of your premium/risk exposure paid per month – goes towards your accident risk. Which means – that the impact of the depreciation of your vehicle is lost in the bigger scheme of risk exposure.
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