It’s no word of a lie to say that the cost of insuring a car has increased at a phenomenal rate over the past couple of years. You can now expect to pay, on average, £816 for a comprehensive car insurance policy.
I suppose we should be smiling. That’s actually better than you would have been quoted this time last year when the average policy was a tad more expensive still, at £835 a pop.
It’s small beer though when you consider that car insurance prices are still a whopping 61% higher than they were at the end of 2006.
And the overall average cost could easily shoot up again before the year is out, when the EU ruling banning cheaper prices for women drivers come into force this December. Take a look at Is the battle of the sexes really nearly over?
So don’t expect those soaring premiums to fall to a more modest level any time soon.
But what’s going on?
Why are premiums going up and up?
The statistics suggest that something is amiss. While Department for Transport statistics show the number of accidents involving car drivers has actually fallen by 10% over the past three years, the number of claims for an injury sustained in a car accident has increased by 43%. The figures clearly don’t add up and we motorists are the ones who end up paying the price.
Insurers are quick to counter claims that they are ramping premiums to boost their bottom line. They lay the blame for the massive hike in premiums squarely at the feet of uninsured drivers, fraudulent insurance claims and the rapid rise of the so-called ambulance chasers, more properly known as personal injury claimants.
As Simon Douglas, director of AA Insurance says, there is undoubtedly a corrupt element within the motoring community that is to blame, at least in part, for the hike in insurance premiums across the board.
False and exaggerated personal injury claims have also added to the woes of anyone looking for a competitive car insurance premium.
And it is a real problem. According to figures from the Association of British Insurers, detected fraud amounts to a staggering £17.5 million per week – an increase of 9% over the previous year.
Just the tip of the iceberg?
The fact is that the insurance industry is in the grips of a massive fraud. It estimates that it lost £2 billion industry-wide as insurance claims outstripped income from car insurance premiums.
Then there are the uninsured drivers who add to the honest motorist’s woes. Last year police confiscated more than 150,000 cars that were driven without insurance.
The Continuous Insurance Enforcement law, which made it an offence to keep an uninsured vehicle, unless it has a Statutory Off Road Notification (SORN) or is exempt, is a big step as it makes it an offence to even keep an uninsured car, nevermind try to drive one without insurance.
In theory clamping down on these uninsured drivers and car owners should help drive costs down. If the insurance giants are telling us the truth then as long as these measures to tackle uninsured drivers and fraudulent claims work, we should see premiums start to fall once again.
In the meantime the message is, shop around and try to get yourself the best deal available. Motorists can make significant savings on their premiums by doing so – even if the savings still don’t quite bring the price you pay back down to 2006 levels just yet.