Cost Of Motor Insurance Up By 37.5%

The cost of an average car insurance policy has grown by £177 since last year, with 17-20 year old drivers seeing a whopping increase of as much as £616.

The latest car insurance price index (CIPI) information published from EMB reveals that the average car insurance premium in the UK is £650, which is a 37.5% price rise when compared to October 2009.

The report also reveals that young drivers are bearing the brunt of these rising premiums. The 17 to 20 age group has seen the largest quarterly increase for comprehensive policies, with premiums rising by 10.9% or £283.

Consumers trying to save money on their motor insurance by taking out third party, fire and theft (TPFT) policies have also been left disappointed. Motorists who have opted for third party, fire and theft cover have faced above average quarterly increases some 11.7% and a huge rise of 54.2% since last October.

In order to guard against parents “fronting” for their children in the face of these massive premium rises, “Insurance plus one” policies have suffered price increases of 65.6% for men and 60.3% for women aged 46-50 over the last 12 months.

Commenting on the findings, Peter Lee, a partner at EMB, said: “The scale of bodily injury claims inflation revealed in a recent study of 85pc of the private motor market has emphasised the need for price rises.”

AA Voices Concerns Over Gender Discrimination Effect On Car Insurance

The AA have this week expressed their concern at the prospect that EU gender discrimination rules may remove the possibility to offer female drivers a preferential motor insurance rate.

AA Insurance director Simon Douglas commented that: “If this becomes enshrined in UK law then young women, who suffer substantially fewer serious collisions than men of the same age, would subsidise the premiums of male drivers.”

Statistically, young male motorists typically make claims that are twice as large as those made by women, Douglas adds.

The AA’s comments follow recent claims made by EU advocate Juliane Kokott who proposed that basing car insurance premiums in part on gender is a violation of the fundamental rights of the individual.

Uninsured And Fraudulent Drivers Add £50 To Motor Insurance Premiums

Research conducted by Co-operative Insurance has revealed that UK motorists are forking out £1.25 billion a year to subsidise the activities of dishonest drivers.

According to the findings, the average UK motor insurance premium includes a £50 penalty to help cover the costs incurred by uninsured and other fraudulent road users.

During the launch of a joint initiative between the Co-operative Financial Services and road safety group Brake, the Co-op’s chief operating officer, Tim Franklin, said: “Millions of people are deliberately flouting the law by not insuring their cars at massive cost to honest road users and the wider insurance industry, posing an unnecessary and unjustified risk.”

Franklin also went on to add that: “Whilst work is continuing to highlight the dangers of uninsured drivers – and keep them off the UK’s public highways – by the police, road safety groups and the insurance industry, there is clearly more to be done.”

Just last month The Motor Insurers’ Bureau (MIB) published a list of the UK’s top uninsured driving hotspots with Barkerend in Bradford at the top of the list.