Rise in premiums to continue
Car insurance premiums have risen 13% to an average of £788 in the last year.
This follows a surge in costly claims, according to market research agency Consumer Intelligence, which found advances in technology – cameras and sensors for example – had driven the price of repairs up.
Drivers in the north west and London are really feeling the pinch, with their premiums up to 50% higher than the national average. In the north west premiums jumped 17.3% to £1,177 while London’s rise of 16.7% saw premiums increase to £1,068.
Consumer Intelligence compared prices offered to 3,600 people and found ‘huge differences’ across age and location. For drivers under 25, the average premium is £1,831, while older drivers generally only have to fork out £348 per year.
Geographically, the cheapest place to insure a car is Scotland at £562.
Prices are expected to rise further this year with the rate on Insurance Premium Tax rising to 10% on 1 October.
Ian Hughes, chief executive of Consumer Intelligence, said, ‘The latest increase in insurance premium tax which takes effect next month, as well as rising claims, are driving the rise in premiums.’
LV= said on Monday motor claims inflation was ‘at the top end of our expectations. As a consequence of the combination of reduced investment income and higher claims inflation, we expect to see the strengthening of motor rates continue in the second half of the year.’