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Car insurance premiums on the rise

Car insurance premiums on the rise

Category: Car insurance

Updated: 30/07/2015
First Published: 30/07/2015

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Remember when we talked about the days of cheap car insurance coming to an end? Well, it looks as though it's happened, with latest figures from the Association of British Insurers (ABI) revealing that the average car insurance premium rose by 2.1% between April and June, with the typical cost of a comprehensive policy now standing at £367.

This is up from the average price of £359 seen in the first three months of the year, and although it isn't a huge amount in numerical terms, it still won't come as welcome news to customers hoping to keep their premiums low. In fact, the year-on-year increase stands at 2.9% – with prices at the same point last year standing at £356 – and by all accounts, the increases look set to continue.

It's not all doom and gloom, however. Average car insurance premiums are still lower than they were in the second quarter of 2013 (£377) when the Government introduced reforms that included a reduction in legal fees for personal injury claims, a move that meant insurers have passed on around £1.1 billion of savings on to motorists.

However, personal injury claims are on the rise – data shows that the number of personal injury claims related to road accidents was 12% higher for the year ending April 2015 compared with the previous 12 months – and it's this that's pushing up premiums.

Rob Cummings, of the ABI, commented: "Motorists have seen a solid two years of lower insurance premiums as a result of market trends and the Government's reforms to tackle frivolous personal injury claims, and over a billion pounds' worth of savings have been passed on to customers.

"With pressure on premiums increasing, however, it's important the Government continues its work to tackle the compensation culture and attack the high cost and number of whiplash claims.

"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. This makes action against Claims Management Companies and tackling whiplash claims a key priority."

What can you do?

Unfortunately, there are some aspects that you won't be able to change – the rise to insurance premium tax, for example – but if you want to get a great deal, there's one key thing you need to do: shop around! That's the only way to be confident you're getting a policy that meets your needs and your price range, so use our search tool to see if you can avoid the premium rise.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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