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Car insurance RISE – You could face higher premiums and here’s why

during the final quarter of 2017, seeing yet more price hikes for drivers. 

The new data released by MoneySuperMarket, revealed that drivers were stung with a four per cent increase to full comprehensive payments during the final three months of last year.

This took average premium costs up from £553.28 to £574.11 based on analysis of 1.5 million car insurance quotes. 

Drivers across the UK faced different increases in costs with motorists in Lincoln being stun the worst with a 9.21 rise from £399.84 to £436.67 – a £36.83 rise. 

Conversely, those in Sutton and Preston saw average fully comprehensive premiums fall 3.96 per cent and 2.61 per cent respectively.

Despite the increase towards the latter quarter of the year, average fully comprehensive policy costs fell one per cent compared to the same period in 2016, from £581.77 to £574.11. 

Men are still on average paying more than women but both genders enjoyed a marginal average decrease in costs. 

Women saw the average cost of a fully comprehensive policy decrease 2.62 per cent in Q4 2017 vs the same period in 2016, from £542.98 to £528.76, while men saw a fall of half a per cent, from £612.70 to £609.66.

It was bad news for older driers as those aged over 65 saw the average year-on-year cost of a fully comprehensive policy rise seven per cent, from £254.06 to £273.02. 

Unsurprisingly those aged between 21 and 24 were also hit with major cost increases of seven per cent, with the average policy rising from £1055.90 to £1128.94 – or £73.06.

Fluctuations and change to the price of premiums were affected by three factors during 2017. 

These were changes to the Ogden rate, increase to Insurance Premium Tax and an increase in fraudulent claims. 

The Ogden rate, which is used to calculate the discount rate applied to claims pay-outs, was changed from 2.5 per cent to 0.75 per cent in March, which increased the amount insurers had to to pay out int he result of a car accident.

In again to make it fairer and is expected to take place in 2018. 

Car insurance price increaseGETTY

Car insurance prices increased in final quarter of 2017

Insurance Premium tax also increase by 20 per cent from 10 per cent to 12 per cent in June. 

Fraudulent claims, which include fabricated or exaggerated whiplash claims following stages or deliberate ‘accidents’, is thought to add £40 to the average premium cost. 

Kevin Pratt, consumer affairs expert at MoneySuperMarket, commented: “Last year showed how many factors influence what we pay for our car insurance. 

“The change in February to the way compensation payments are calculated took everyone by surprise, and the hike in IPT in June was another hammer-blow.

“It is likely the discount rate will be set at between 0 and 1 per cent at some point in 2018, which should allow insurers to reduce premiums. We can only hope there are no further increases in IPT, either in the Chancellor’s Spring statement or in the Budget in November. 

“We should also keep an eye on reforms to the small claims process, due in October. Hopefully these will reduce the incidence of fraudulent whiplash claims.

“Regardless of age or location, everyone should avoid settling for the quote they receive from their existing insurer, because firms tend to reserve their best prices for new customers. 

“Shopping around at renewal is the easiest and most effective way of reducing your premiums, with significant savings available.”

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I'm a 50 year old PLC programmer from Burnley, UK. I severed my time as an electrician in the baking industry and soon got involved with the up and coming technology of PLC's. Initially this was all based in the Uk but as the years went by I have gradually worked my way around the globe. At first it was mainly Mitsubishi with a bit of Modicon thrown in but these days the industry leaders seem to be the Allen Bradley range of PLC and HMI’s.

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