Is insurance an expense?
We often hear that motor insurance premiums are too high, especially when the car is low value. But it’s not about the car but what you can do with it.
A neighbours’ 17-year-old son paid £700 to buy a nice little Peugeot 206. His insurance premium was about £2,000. He was not too happy about the insurance cost and having to behave due to the black box fitted.
On Christmas Eve he drove onto a roundabout, forcing a new-ish Range Rover to swerve onto the island, causing it to roll. It’s a write-off. The driver and passenger were both hospitalised. The claim reserve (the estimated final cost to the insurer) is £150,000, so £2,000 for a policy seems like a bargain.
Insurance is not an expense. It’s an investment in peace of mind.