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#Car #premiums up by £20 in Q3 2016

By 10th April 2018 May 14th, 2019 No Comments
AA Index says rise in IPT and the high volume of whiplash claims are to blame,Motorclaimguru says”nonsense” Not true.

​Car insurance premiums are continuing to rise, according to the AA’s latest British Insurance Premium Index.

The index revealed that the average shop-around quoted premium for a comprehensive car insurance policy has increased by more than £20, to £585.84, over the three months ending 30 September 2016.

Premiums have jumped 3.7 percent over the quarter and by 16.3 percent over the last 12 months.

“We are witnessing sustained price increases once again which is bad news for drivers,” said Michael Lloyd, the AA’s director of insurance. “I can’t see an immediate end to the current upward trend.”

IPT
According to Lloyd, the two increases in Insurance Premium Tax (IPT) over the year have added about £18 to the average car insurance premium, and he urged the Chancellor to “keep his hands off” in the Autumn Statement.

He continued: “Motor insurance is a mandatory requirement and there is absolutely no justification for further hikes in IPT in the Autumn Statement.

“Coupled with predicted price increases, any additional tax burden would simply add to the growing number of uninsured drivers.”

Whiplash
In addition, Lloyd stated that the high volume of whiplash claims and the cost to insurers of price comparison site business were other factors contributing to upward premium pressure.

He added that more than 839,000 small injury claims had been made over the last 12 months, of which around 750,000 were for whiplash.

“The whiplash epidemic has dogged the British motor insurance industry for a decade and continues to do so,” Lloyd said.

“Drivers are still being pressured into making claims for often minor collisions they might have forgotten about. This is pushing up claims costs, because insurers can’t prove that an injury wasn’t suffered.

“I do recognise that whiplash can be a serious and debilitating condition. But the activities of claims firms makes life more difficult for those with a genuine injury.”

Price
In addition, Lloyd noted that in his view drivers are being poorly served by “the structure of a market that encourages people to shop only on price”.

“There’s little incentive for insurers to offer low, loss-making introductory quotes on price comparison sites because not only do they pay a fixed introductory fee that could be a substantial proportion of the premium, but there is little likelihood that such customers will remain.

“Customers don’t necessarily recognise that a low initial premium is a first-year introductory discount so they go elsewhere. Inevitably, this will tend to push those initial premiums up and perhaps offer greater scope for insurers to reward loyalty.”

this article is care if Insurance age and can be found herehttp://www.insuranceage.co.uk/insurance-age/news/2475564/car-premiums-up-by-gbp20-in-q3-2016?utm_medium=email&utm_campaign=IA.Breakfast_Briefing.DU.A.M-F0830&utm_source=IA.DCM.Scheduled_Updates#

Tim Kelly

Tim Kelly

Tim is a highly qualified Independent Engineer with over 20 years experience as an Engineering Assessor of damaged vehicles.

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