Car insurance Updated:
Car insurance is one of those things that no-one really likes paying for, and unfortunately, it could be even more of an unwelcome expense in the year ahead, with research showing that the cost of car insurance premiums soared in the last few months of 2015 – and it isn't showing any signs of slowing down.
The latest Insurance Price Index from the British Insurance Brokers' Association (BIBA) and Acturis has revealed a "significant rise" in the level of premiums charged for private car insurance policies, as in the final quarter of 2015, annual premiums for car insurance rose by 8.6% compared with the same period in 2014.
And that's before we even factor in the rise in insurance premium tax (IPT) that came into effect in November, spelling even more bad news for motorists: the tax rose by 58%, which in real terms, means that the actual cost of car insurance polices rose by over 12% year-on-year.
The only positive finding was that the cost of home insurance policies has fallen by 4.8% year-on-year, but while that's good news for homeowners, the rising cost of car insurance will have largely outweighed the savings for many.
Steve White, CEO at BIBA, commented: "BIBA has said many times that IPT is a tax on protection and affects the affordability of insurance. The motor insurance industry has worked hard to tackle fraud to help minimise rises in premiums, so it is particularly worrying to see such a significant increase fuelled further by the IPT rise, especially in a period when we are seeing the number of uninsured drivers rising."
The rise in car insurance premiums signals an end to the run of more affordable policies that had been seen in recent years, with prices having consistently fallen since the end of 2012. Unfortunately, it looks as though prices could be starting on more of an upwards path, which makes it more important than ever to compare premiums and make sure you get the policy you want at the right price. Remember – loyalty rarely pays!
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