The average car insurance premium is now £695, gone up by 56%, an extra £322 during 2010, tripling the rise back in 2009. The rise in premiums has affected all age groups, not just young drivers. Last year was the worst year for car insurance premium rises, and we are now seeing a ripple effect going into 2011.
There are a number of reasons why costs soared throughout the year:
Uninsured Drivers This spring a new system called Continuous Insurance Enforcement will be introduced. It will be an offence to keep a vehicle uninsured even if you don’t use it. This system compares the DVLA database with the Motor Insurance Database (MID), whose staff will contact drivers who are uninsured and urge them to obtain insurance.Those who ignore this advice will be issued with substantial penalties if they fail to cooperate.
Credit car hire costs Some firms which have entered the motor claims market offer motorists who have been involved in a road traffic accident a replacement vehicle. If someone successfully makes a personal injury claim against the driver at fault in an accident, they can recover the cost of hiring a vehicle from the other party’s insurer. Many motorists who have been involved in a road traffic accident also seek legal advice from alink=http://www.phclaw.com] personal injury solicitor [/link] over claiming compensation, and recover the costs for this. Insurance companies get this money back by raising everyone’s premiums.
Price comparison sites Price comparison sites are an effective and relatively easy tool to use for comparing like-for-like policies. They have increased competition within the market place and, according to insurers, kept premiums unrealistically low. Over the past 12 months or so, prices have risen as insurers try to claw back their losses.
Motor insurers losing profit The number of people seeking personal injury advice or looking to make a personal injury claim has almost doubled in the last year. This has increased insurance costs by an average of around 30 per cent and accounts for around 10 per cent of all car insurance costs (according to the Association of British Insurers). Industry experts are adamant that motor insurers have not made a profit in the last 16 years. It is estimated by industry experts that the average car insurance premium will rise by between 10 and 20 per cent this year. Most people have been involved in a road traffic accident seek the advice or a personal injury solicitor.