Insurance Inflation

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Sir,

From time to time you have published in Motor Sport the most revealing letters concerning the iniquities of the motor insurance business. I feel that my recent experience may be of interest.

As you will see, I am serving in Germany. A year ago the gross premium for comprehensive cover for my Renault 16 TS was £90; I have just received a renewal notice which quotes the premium as £187, an increase of 108%. The premium for my 1967 Fiat 500, purchased in November 1973, has increased over 17% since the day on which I bought it. As you will see from the attached photostat I am insured with a well-known British company which, incidentally, does a great deal of business with servicemen in Germany through the medium of a NAAFI Agency.

Naturally, the usual excuses have been given another airing—unfavourable results, changes in international currency values, etc., ending with the statement that the increase is unaffected by the current counter-inflation programme.

Those of us who have the privilege of serving Her Majesty overseas are fully aware of the effects of the floating pound; any increases in our salaries are governed by the deliberations of the Pay Board whilst the local rise in cost of living is most certainly not controlled by that same august body. Be that as it may, the pound has fallen by some 20% against the Deutsche Mark in the last year, not 100% as the increase in premium would seem to suggest.

The grim truth is, of course, that with the acumen so ably demonstrated by many insurance houses in the UK, a company has taken the opportunity of by-passing regulations in force in Great Britain and applied a swingeing increase to its overseas customers. This would be amusing if it were not so painfully obvious.

I suppose I should be exceedingly grateful that the maximum no claims bonus has been increased from 50 to 60%.

BFPO 39 R. M. Hancock (Major)