Insurance Premiums - Why are they so high?

Regular readers of this blog will be familiar with my photographic efforts and that I had a wee accident during the Devil's when my Nikon D50 DSLR camera was inadvertently dropped and damaged.
I took it into a Glasgow camera repair company who, a week later, gave me an estimate of £262.00 including Vat for the repair of the camera and lens,both of which were damaged but repairable.
I decided that it was time to finally make a claim on my home contents insurance that fortunately included accidental loss or damage outwith the home. All I was expecting was a go ahead on the repair and for them to send me the cost of repair, less my excess.
I contacted Aviva gave them all the details and they passed my claim to another firm IVAL who would be contacting me in a few days. So I waited, and waited and eventually I contacted them. And gave the girl on the phone all the details - again. She took all the details and put me through to their technical services department who didn't answer. I hung up and called back to the first girl who booked an appointment call for the following day. This call was prompt to the minute and I spoke to another girl and gave her all the details.... again! She told me the camera would be uplifted from me by a courier company the following day and off I went to Glasgow to pick it up. I explained to the guy at the repair firm that the insurance company wanted the camera and he seemed amused at this. I wondered why.
Again, the courier company arrived in time and took my carefully packaged camera off to Eastbourne to the IVAL technical services department. I sent the receipt for the camera and a cheque for the excess off to IVAL by recorded delivery and sat back to await my camera's return in 28 days. I was like a man who had lost his right arm, not having my camera. I presumed that the camera would be repaired by a repair firm either owned by the insurance company or at least who had a deal that would have made it more economical for the insurance company than having it done in Glasgow. How wrong was I?

This morning I received a call from IVAL. After a few security checks to ensure I was the person THEY had phoned, (what is that all about?)the lovely young lady proceeded to tell me that having examined the camera (that could be repaired for £262 remember), they had concluded that they would require to have it replaced. By a new Nikon D5000 and a 18 - 105mm lens. They will order it today and I would have it in araound two weeks. Would that be acceptable?
Is JR a geriatric?
Too bloody true it is acceptable!

But what the F--- gives here? They are ordering it from Warehouse Express and sending it by next day delivery from their place (again, why not get warehouse express to send it direct)at a cost according to WE's website of..... wait for it £754 less any discount they get if they have a contract with them.
My original camera cost me 582 quid nearly four years ago.

Now I don't have a problem with a new camera with twice the pixels of the original(12.3 mp), a moveable screen, live view (D50 doesn't,) a shutter speed twice that of he D50),continuous shooting at 4 frames per second, a lens with more range and all the accessories I'll get with a new camera. Absolutely no problem at all. No, siree! Not against getting the old camera repaired for 262 quid.
But why do we pay such huge premiums for insurance? I just can't figure it out!