Premiums only heading one way
Motor insurance premiums have increased 10% in a year, according to figures released by the Association of British Insurers (ABI).
Its Quarterly Average Private Comprehensive Motor Insurance Premium Tracker found that the average price paid for comprehensive car insurance rose slightly from Q1 to Q2 this year, but comparing prices to 12 months ago reveals a sharp 10% rise, with premiums on average £39 more expensive than in 2015.
ABI says these figures ‘illustrate the ongoing pressure on premiums driven by increases in Insurance Premium Tax (IPT) and the rising costs of personal injury claims.’
RMI Bodyshops director Jason Moseley said, ‘It is not just insurance tax and personal injury claims that are causing the price of insurance premiums to rise. RMI Bodyshops commented on an investigation conducted by the Competition and Market Authority in 2014, which aimed to reduce the price of private motor insurance. Since this investigation, however, the price of premiums has increased month on month, and this shows no sign of slowing down.
‘We feel that several factors are contributing to this: claims-farming is still prevalent within the industry, which is driving up prices; insurers continue to charge one another high costs for non-fault accidents; third party claim intermediaries take a cut of pay-outs.
‘Fair treatment by insurers is something that RMI Bodyshops shall continue to push for. Motor insurance is a social utility that needs to be monitored by the government to ensure that the motoring public are protected. We fear that higher insurance premiums could ultimately affect jobs – if the price of premiums rises too high, people will be unable to insure their vehicle to allow them to travel to and from work.’