Motorists hit by 19 per cent rise in car insurance premiums

Wednesday, July 13, 2016

 

Motorists in the UK are facing the biggest annual price hikes in car insurance premiums, seeing a 19% rise in the past five years.

 

According to price comparison site, Confused.com, prices have risen by £115 over the last 12 months. Drivers are paying £715 on average for their comprehensive car insurance premium, compared to just £600 this time last year, stated in the press release.

 

Prices rose by a "significant 6%' from the first quarter of 2016, equating to an additional £44 on premiums over the last three months.

 

Amanda Stretton, motoring editor at Confused.com, believes rising premiums have been caused by insurance companies failing to make a profit.

 

She said: "Insurance companies are still not making a profit according to the Combined Operating Ratio that is collated by the industry. 

 

"The most recent shows that for every £1 that an insurance company takes in premium, their costs are more than £1.01."

 

Every age group has seen a rise in prices, with young drivers less affected. The youngest drivers, 17-year-olds, have experienced the smallest yearly increases compared to any other age group. However, their average premium has broken the £2,000 mark and now sits at £2,013. 

 

Females aged 17-20 have also escaped the maximum hikes, however they're still facing an annual price increase of 15%. While it's still lower than the national average, it still equates to a rise of £223 over the year, resulting in a current premium of £1,671. This means that there has been a £94 increase over just three months.

 

Older motorists have experienced the greatest yearly increase in the cost of their cover, for example, drivers aged 61, are now paying an average of £418, 24 per cent more than they were one year ago. 

 

In Northern Ireland, the cost of car insurance rose 25 per cent annually, with the average premium now standing at £863. In the Scottish Highlands and Islands region, prices rose by 24 per cent over the past year, resulting in Northern Ireland and Scotland seeing the highest rise in prices.

 

"We've not seen price rises of this magnitude for five years - a 19% annual increase is substantial to say the least," said Stretton.

 

"And these prices are being felt across the board, for drivers of all ages and genders, across all U.K. regions. If prices continue to rise at the rate we've been seeing, we could be facing the possibility of average comprehensive premiums breaching the all-time high seen in 2011, when they peaked at £858.

 

"This, combined with rising fuel prices and increased motoring costs across the board, could result in a sizeable dent in drivers' pockets."

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