Car insurance premiums driven up 19.6% in 2009
27 January 2010 / by Rachael Stiles
Car insurance premiums have seen their largest ever annual increase in the last 12 months, rising by 19.6 per cent, according to research by Consumer Intelligence.
The average car insurance premium is now setting drivers back £564.69, the research shows, pushed up by the increasing trend of ‘compensation culture’, which has caused a rise in personal injury claims, and fraud.
UK drivers have paid an additional £2.1billion in car insurance premiums during the past 12 months, with young drivers facing the most significant increases.
Young drivers’ car insurance is traditionally more expensive than for more experienced drivers, but has risen by an average 24.87 per cent in the last 12 months, from £1,275 in January 2009 to £1,489 by the end of last year.
Comparatively, car insurance for the over 65s saw the smallest increase in cost, rising by about half as much as for young motorists’ premiums.
Men’s car insurance premiums saw the next highest annual increase, rising 20 per cent in the last 12 months to an average £599; meanwhile, women’s car insurance premiums saw an increase of 19 per cent to £523, putting an average difference of 12.7 per cent between men and women’s premiums.
But, despite the rising cost of car insurance, the study found that drivers could save as much as 35 per cent on their premiums if they compare car insurance deals.
The average difference between the cheapest and most expensive car insurance premiums is 29 per cent, and of those who switched car insurance providers in 2009 in search of a better deal, more than half saved at least £50 each.
Commenting on the results of the study, Ian Hughes, managing director at Consumer Intelligence, said: “The advent of price comparison websites had actually kept a lid on car insurance premiums for some time, but these figures show the upward pressure on pricing has well and truly broken through.”
Mr Hughes in concerned that the sharp rise in the cost of car insurance will encourage some drivers to go without and drive illegally, and would urge drivers to review their driving habits and compare car insurance deals to keep the cost down.
“In order to reduce their car insurance premiums, motorists need to consider what sort of vehicle they drive, and make sure that they shop around for cover. With such a large number of providers to choose from, the difference between the best and worst quote can be huge,” he said.
© Fair Investment Company Ltd