Association of British Insurers says typical cover is now £462 as whiplash claims and tax hikes hit motorists hard.
Higher taxes and whiplash claims have pushed the average car insurance premium up by 8% over the last year, adding £34 to the average annual cost for drivers, according to the Association of British Insurers.
The increases takes the typical premium to £462, the highest level since the ABI started collecting the quarterly data in 2012. “This reflects continuing cost pressures around rises in whiplash-related claims, Insurance Premium Tax and increasing repair bills.”
Since IPT was introduced in 1994 at 2.5% it has been steadily increased by successive chancellors. It has been hiked three times in the past two years: the last rise of 0.5% took the rate to 10% while in June it will rise again to 12%, making “higher insurance bills for many look inevitable,” says the ABI.
But price comparison websites say premiums are higher than the ABI suggests. Confused.com said that prices have risen by 16% over the past year, with the average premium for comprehensive cover now £781. “Coupled with hikes in road tax for new cars and petrol prices rising since the start of 2017, it’s likely that many drivers will feel the cost of motoring burning a sizeable hole in their pockets,” said a spokesperson.
The change to the way in which compensation for serious personal injuries is calculated – the so-called Ogden discount rate – is also likely to lead to big additional costs, says the ABI.
“Further increases could come as insurance renewals are due in early July or at the beginning of 2018, feed through to premiums insurers have to charge,” said Rob Cummings, the ABI’s assistant director and head of motor and liability.
“Best Family Business” & “Best Legal & Financial Services Provider”
Independent broker Ashbourne Insurance, with its head office in Hoddesdon, has been announced …
15 Feb 2018
From potential issues surrounding Brexit to the rise in artificial intelligence, there are a range of challenges on the horizon for brokers
29 Jan 2018
I read with interest that Public sector organisations have quadrupled the amount of money spent on insuring against terror attacks in the …
4 Jan 2018