Car insurance on upward spiral
Car insurance in the UK has hit a four-year high after rising nearly £35 in the final quarter of 2016, according to the AA’s latest British Insurance Premium Index.
It blamed the spike on influencing factors such as Insurance Premium Tax and whiplash claims.
Overall, the average car insurance policy rose 11.7% in 2016 to £633.06, with £40 the direct result of whiplash claims, according to the AA.
The AA director of insurance, Michael Lloyd, said, ‘The number of personal injury claims has started to show signs of slowing and the Ministry of Justice has embarked on fresh reforms to curb cold-call culture which contributes to Britain’s unwelcome status as the ‘whiplash capital of Europe.
‘Insurance is based on claims experience. It’s also extremely competitive and I have little doubt that if the number and cost of claims falls, then the cost of an annual insurance policy will also fall.’
Meanwhile, the AA has also warned against a rise in uninsured young drivers as a result of high premiums.
Michael continued, ‘Paying an average of over £1,400 for a year’s cover, compared with £380 for those in their sixties, young drivers have been particularly hard hit by the rise in IPT which, by June, will have doubled in less than two years.
‘I believe that this is fuelling the rise in uninsured driving. This isn’t a victimless crime because compensation for injury and damage to third parties, caused by uninsured drivers, is ultimately paid for by insurers to the tune of around £35 per policy.’