Car insurance premiums in Britain have increased by 16.3 per cent or nearly £82 over the past year. That’s according to research from the AA, based on its latest British Insurance Premium Index.
The AA has found that typical premium quotes for car insurance have risen by 3.7 per cent in just the previous quarter of this year. The company’s findings are based on quotes obtained from a pool of customers nationwide which help keep track of prices throughout the year.
What’s to blame for rising premiums?
According to the AA’s director of insurance, Michael Lloyd, the rise in car insurance premiums this year can be linked to three factors. One of these is the Insurance Premium Tax (IPT), which has been increased twice in the past year and this alone has added an estimated £18 to average premiums.
Another factor highlighted is the continuing “epidemic” surrounding whiplash claims in Britain. Lloyd said: “Drivers are still being pressured into making claims for often minor collisions that they might have forgotten about. This is pushing up claims costs because insurers can’t prove that an injury wasn’t suffered.”
Lloyd also says that price comparison websites are driving up insurance premiums. He explained: “There’s little incentive for insurers to offer low, loss-making introductory quotes on price comparison sites, because not only do they pay a fixed introductory fee that could be a substantial portion of the premium, but there is little likelihood that such customers will remain.”
The Association of British Insurers (ABI) has commented that delays with proposed government reforms to personal injury claims are costing motorists £3 million a day, based on the Government’s own calculations.
