The average cost of car insurance is being pushed up by a fresh wave of personal injury claims covering things like whiplash, according to the Association of British Insurers (ABI).
Motorists paid an additional two per cent on average for annual comprehensive cover in the second quarter of this year than they did in the first, the ABI’s figures claim.
In real-world terms, drivers in the UK are now paying an average £367 premium for the months of April, May and June, compared to an average cost of £356 for the same period last year.
According to the Association, the number of personal injury claims related to road accidents has climbed by 12 per cent compared with last year, pushing costs upwards.
Earlier this year, similar statistics from insurance broker Aviva claimed that claims for whiplash alone have increased every premium in the country by an average of £93.
Aviva has stated that more than 840,000 claims for whiplash were submitted for the last financial year. That equates to 2,300 separate claims each and every day, a nine per cent rise over last year.
Previous research has also shown that around six per cent of drivers said that they would consider making claims for personal injuries like whiplash, even if they weren’t actually hurt at all.
In total, eight out of every 10 personal injury claims involving car collisions include whiplash, which is significantly higher than the number of whiplash claims in other European countries.
Maurice Tulloch, Aviva UK and Ireland’s CEO, said: “Sadly, we are now witnessing a resurgence in the number and cost of whiplash and soft-tissue injury claims despite some very positive developments, such as the LASPO Act, which helped reduce customer premiums.”
The LASPO Act, otherwise known as the Legal Aid, Sentencing and Punishment of Offenders Act, came into force in April 2013 and aimed to put a cap on personal injury claims.
Regardless, average premiums remain lower than the typical costs before the LASPO Act was introduced, with savings of an estimated £1.1 billion passed on to motorists.
However, after the government’s summer Budget revealed a 3.5 per cent rise in insurance premium tax from November, insurers have warned that higher costs could be around the corner.
Rob Cummings, the ABI's manager for general insurance, said: "UK drivers benefit from one of the most competitive motor insurance markets in the world.
“But with pressure on claims costs and an increase in insurance premium tax adding an additional £12.80 to the cost of the average policy from November, other factors are starting to put up costs.”
