Car premiums leap 10%
Car insurance premiums took a sharp upward turn during the fourth quarter of 2015, adding £59 to the typical quoted premium for an annual comprehensive policy, according to the AA’s benchmark British Insurance Premium Index.
Over the three months ending 31 December, the average quoted ‘Shoparound’ premium rose by over 10%, the largest such increase since 2010. Although premiums are rising, the increase in Insurance Premium Tax (IPT) has piled on the misery for motorists who have seen the typical cost of their cover rise by 20% over the past year.
According to the AA’s ‘Shoparound’ figures, an average of the five cheapest quotes in a nationwide basket of ‘customers’, the average premium for comprehensive cover rose from £566.56 to £625.70, up 10.4% over the last three months. Over the year, premiums rose by 20.3%.
The new figures coincide with publication of both the industry-wide Insurance Fraud Taskforce (IFT) report and the British Insurance Brokers’ Association (BIBA) Manifesto (on 18 January 2016).
Both highlight the considerable cost to all policyholders – estimated to be around £50 per policy – of those who steal from insurers by making false of exaggerated claims.
Michael Lloyd, director of AA Insurance, said that personal injury claims – particularly whiplash injuries – continue to haunt the industry.
‘The UK suffers the unenviable reputation for being the ‘whiplash capital of Europe’ with the number of claims continuing to pile in, encouraged by vigorous cold-calling claims firms.
‘New legislation proposed by the Chancellor in his Autumn statement and again in January, designed to curb claims activities and weed out spurious and fraudulent injury claims, is some months away from becoming law but are widely welcomed by insurers.
‘Meanwhile, the IFT, to which the AA contributed, has proposed a range of additional measures to help tackle fraud ranging from organised crime to opportunistic attempts to rip off insurers, which has been welcomed by the Government.’
Michael continued, ‘We expect premiums to continue to rise though 2016 but not at the exceptional rate recorded over the last quarter of 2015. And the sooner new legislation to tackle whiplash claims becomes enshrined in law, the sooner that will be reflected in the premiums quoted for car insurance.’