The Transport Select Committee has head that car insurance premiums have rocketed by 40% in the last year, with younger drivers bearing the brunt of premium increases.
A combination of increased fraud, higher personal injury costs, the rising popularity of claims management companies and the impact of claims involving uninsured drivers are all to blame for the ratcheting up of motor insurance premiums.
Young drivers pay more
Younger drivers are being most acutely affected, with the average comprehensive insurance premium rising by 51%. Duncan Anderson of insurance specialists EMB Consultancy said: ‘If claims continue to rise at the rate they have been increasing, rates will continue to increase as well. Bodily injury claims are increasing at a rate of 30% and other claims types are increasing by 5% an annum. Overall there might be a 15% to 20% natural increase in claims costs if things continue as they are, which will be reflected in ever-increasing premiums.’
Younger drivers typically pay insurance premiums of between £2,000 and £3,000, which is often far more than the value of their car.
Research the best car insurance deals
Which? insurance expert Dan Moore said: ‘Car insurance is a must for drivers, but the rate premiums are increasing by is likely to create serious problems for motorists. It makes it more important than ever for consumers to devote a little time in the run-up to their renewal date to look around for the best deals. The sums involved more than warrant this attention.’
See the Which? Car insurance advice guide for more on how to buy a motor insurance policy.
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