Insurance premiums increase by 4.8%
Car insurance premiums have risen by 4.8% in the third quarter of 2015, according to the latest AA British Insurance Premium Index.
The AA has said that the average ‘shop around’ quote for car insurance had risen to £569, an increase of £26 over the three months ending 30 September, and the second successive quarterly increase this year.
According to AA the upward trend follows two years of falling premiums which started on the promise of sharp reductions in personal injury claims that were expected to follow Ministry of Justice reforms to limit fraudulent claims.
Janet Connor, managing director of AA Insurance said, ‘Although huge progress in fraud detection has been made, too many people still consider it acceptable to make injury claims even if none were suffered, often encouraged by claim firms.’
‘And news that the Judicial College is recommending to courts a 5% increase in payments for injury claims will only add to upward premium pressure and encourage more attempts at whiplash injury fraud.’
The AA also said that it expected the increase in Insurance Premium Tax (IPT) to add around £20 to the cost of an average policy.
Connor continued, ‘It’s those who pay the highest premiums, particularly young drivers who least can afford the increase and will bear the brunt of this stealth tax.’
‘The AA and industry bodies such as the British Insurance Brokers’ Association (Biba) have lobbied the government hard to think again – or at least allow young drivers to pay their first car insurance premium tax-free.’
The firm also added that it expected car insurance premiums to continue rising into 2016.