Nobody would be surprised to know that car insurance premiums are increasing with every passing year. In fact, it is an all known fact and is often verified by the Association of British Insurers (ABI) tracker. However, it is always interesting to see how these figures compare against the AA British Insurance Premium Index which was released a few days ago.
As per the statistics suggested by the AA, the average premium has increased by £82 when compared to last year. The average cost of a car insurance policy is now a staggering £585.84, which is a stark rise of 16.3% when compared to last year. However, comparing against the figures given by the ABI, we note a 9% rise in average premiums and the policy price reaches £440 this year.
One point to note here, is that the ABI surveys are based on the cost incurred by a consumer for the cover while AA figures are calculated upon the shop around or comparison data.
Statistics highlighted in the report:
A comprehensive car insurance price has reached £440, which was 1% more than the second quarter of the year.
The premium for a comprehensive car cover has increased by 9%, which means that there would be an added £38 in the yearly cost which was £402 until last year.
According to the ABI, there are several factors responsible for this increase in the car insurance premiums such as a 5% increase in average body injury claim settlement which equals to £10,955 on an average.
It also pointed out that over the last three years there is a 25% increase in the vehicle repair cost ending up to £1,655 on average. Moreover, the rate of Insurance Premium Tax has increased by two-third in a period which is less than a year.
The ABI’s head of motor and liability stated that “Insurers are fighting the corner of hard-pressed motorists, despite facing a triple whammy of rising costs from personal injury claims, repair bills and Insurance Premium Tax.”
Pondering upon the price rise in the motor insurance market, Shay Ramani, founder of FreePriceCompare.com, can clearly understand that the price rise is most harmful for the honest motorists. This needs to be addressed by the government and some planned reforms should not only be suggested but implemented. People are waiting for the government to address the compensation culture which was announced last year. Strict action should be taken to stabilise the car insurance market and the sooner it’s done, the better it is for the motorists in the UK.