By How Much Are Car Insurance Premiums Set To Rise By 2011 and Why?

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=] 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.

The End of Cheap Car Insurance?

With the UK suffering a recession and many people losing their jobs and the threat of redundancy hanging over many people, we are all looking to economise and save money wherever we can. There are many areas where we can save money and try to cut back on the bills by economising. Just about everyone likes to take advantage of a good deal when they see one and there are many great deals available if you take the time to look for them. There are many good deals to be had on the internet and with the internet being a global market place we can search for deals around the world.

Probably the second largest investment we make after our homes is our car. With more and more car owners and more and more cars on the road the car is no longer seen as a luxury item but is a necessary part of most people’s lives, enabling them to get to and from work and for social, domestic and pleasure purposes. The cost of insuring our cars has been steadily rising over the years and many drivers, especially younger drivers, are now paying premiums well in excess of the value of the vehicles they are driving. Insurance is something we have to have and we have to pay every year that we own a vehicle, so shopping around to get the best possible deal is becoming increasingly important.

By shopping around we can save hundreds of pounds and there is a wealth of companies out there to choose from. A quick search on the internet can bring back many insurance companies offering cheap car insurance. Many online car insurance companies also offer special deals and discounts if you sign up via the internet. There are also some great comparison websites and services on the internet which when you enter your car insurance details will search through a number insurance of companies and produce a list of quotes for you from the different companies.

Many companies also specialise in different types of insurance and different insurance groups. One type of specific insurance is classic car insurance and visiting these companies to obtain a quote for your classic car can save a lot of money when compared with mainstream insurers.

The recent ruling by the European Court of Justice will mean that many car drivers will see rises in their car insurance premiums when insurance companies seek to claw back reductions in male car insurance car policy premiums. The European Court of Justice’s ruling said charging different rates for male and female driver’s was not legal.

This means an end to different premiums for male and female driver’s insurance premiums. The European Court of Justice ruling comes into effect from December 2012, the reason for the delay is to allow insurance companies time to restructure their premiums and systems. When the ruling comes into force then it will make shopping around for cheap car insurance even more important.