Car insurance quotes rise by record 20% Compensation culture and uninsured drivers blamed

29 January 2010

car insurance premiums

Honest motorists will be hit by higher car insurance premiums

Car insurance quotes have increased by a record 20% in the last year, according to market researchers Consumer Intelligence. 

More than 100,000 motor cover quotes from different insurers were taken before calculating that drivers faced total increases of £2.1bn compared with what they paid last year.

According to Consumer Intelligence, the steeply rising premiums have been attributed to a rise in accidents involving uninsured drivers, plus an acceptance of ‘compensation culture’ in wider British society - a theory also supported by the AA.

In the same period, the AA's British Insurance Premium Index figures showed that the typical annual comprehensive car insurance premium rose 18.7% in 2009 to above £1,000, - the biggest jump since the index started in 1994.

Rising premiums will hit honest, law-abiding citizens first

“Insurance fraud is costing the industry around £2bn a year, which amounts to £44 on every household's insurance budget," said Simon Douglas, director of AA Insurance. "This is becoming increasingly embedded in British culture and, ultimately, feeds back to premiums."

And as fraudulent claims for things like minor whiplash prevail, the number of uninsured motorists on UK roads has also increased to 1.5 million. The Motor Insurers Bureau (MIB) now reports it has to deal with more than 30,000 claims caused by uninsured drivers annually. Apparently, half of all uninsured drivers are younger than 29, suggesting the penalty fines incurred for driving insured are not a big enough deterrent. 

As these latest figures demonstrate, these additional costs are being absorbed by the majority of honest, law-abiding motorists. Frustratingly, those most badly affected are 17-24 year olds, with the average insurance quote rising by nearly 25% to £1,489.

"The worry, obviously, is that this could result in more motorists simply choosing not to insure their vehicles and drive illegally, or feel that they can no longer afford to run a car," said Consumer Intelligence's Ian Hughes.

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