3/14/2005Speed Cameras Mean Big Profit for UK Insurance Companies
Online car insurance broker website reveals the speed camera profit potential for insurance companies.
In the UK, 1.8 million speed camera violations carrying drivers' license demerit points were handed out last year. Using an independent car insurance research site, confused.com, reveals that insurance companies raise rates significantly for the drivers who received those tickets.
On average, a single camera ticket was found to increase a driver's premium by five to seven percent. Two tickets generally results in a 21 percent increase. A third ticket results in a 40-52 percent increase. For example an 18-year-old London driver of a 1.4 Renault Clio who receives 3 speed camera tickets would pay his insurance company an additional £1,250 (US $2,400).
In the U.S., the insurance industry has been one of the primary backers of camera enforcement. Points are assessed to licenses for photo tickets in California, Arizona and certain photo tickets in Colorado.
While a 30-year-old with three speeding convictions can expect their insurance to increase by 32 per cent, compared to a driver with no convictions, an 18-year-old can typically expect their insurance to leap by 44 per cent. Drivers in their 70s can expect a whopping 53 per cent rise.
Commenting on the findings, Kate Armstrong, managing director of confused.com, said: "Many insurers see a direct link between speeding offences and an increased likelihood of accidents and claims. As a result they are starting to penalise speeders more severely. Of course, not all insurers will penalise drivers equally.