Car Insurance News Car Insurance Rises 3 Times Higher Than Inflation 18471765
Car insurance rises 3 times higher than inflation
31 January 2012 / by Colm Hebblethwaite
Car owners have been hit by a rise on fuel prices for a few years, but it has now emerged that the cost of car insurance has risen dramatically as well.
15% increase in car insurance premiums
The average comprehensive premium has gone up by £128.71 to £971.40 in the space of a year, the AA has claimed in a recent report. In a separate report the RAC says that it now costs an average of £1,556 per year more then it would have in 2007 to own and operate a car. Together this adds up to an increase well above the current inflation rate of 5.0% and presents the UK’s already hard pressed motorists with yet more challenges.
The rise in insurance premiums follows the trend that has been set by the cost of fuel, which is still the biggest running cost faced by motorists. The average driver will now be spending around an extra £160 on fuel a year, which represents a 12% rise in one year. Adding to the pain at the pumps is a similar rise on insurance costs as insurers pass on the higher costs of legal costs, accidents involving uninsured drivers, fraud and associated legal costs.
Women’s car insurance likely to increase
In the past it would be young and middle-aged male drivers, the most statistically likely to be involved in an accident, who would have been hit the hardest by these rises. However, this is set to change after recent changes in European laws which make it a crime for insurers to use gender as a basis for calculating premiums. This means that female drivers could begin to see the costs of womens car insurance begin to rise significantly.
Tips for keeping car insurance costs down
There are a number of ways in which you can try to reduce the costs of insuring your car. The simplest strategy is to make sure that you keep an eye on the market and shop around when your current policy comes up for renewal. It may also be the case that paying a lump sum instead of monthly instalments can get you a better deal. Moneysupermarket have conducted research which suggests that monthly payments could add up to 10.75% on to the cost of premiums.
You can also reduce your premiums by increasing the amount of voluntary excess, although this could obviously see you paying more in the event you are involved in an accident.
There are a number of car insurance options for young drivers, including telematic schemes from companies such as Young Marmalade. These schemes involve installing a box in your car which records your driving and adjusts your premiums accordingly. Placing an older driver on the policy is also an option if you are both sharing the vehicle.
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