Average car premiums increased by nearly £35 over the three months ending 31 December, hitting a four-year high, according to the AA’s latest British Insurance Premium Index.
The index showed that the average shop around premium jumped by 5.8% over the last quarter to £633.06.
Michael Lloyd, the AA’s director of insurance, noted several factors that are influencing car insurance premiums including insurance premium tax (IPT) and whiplash.
He said: “Uninsured driving is rising; partly I believe because of the increases in Insurance Premium Tax (which will rise by another 2% in June), and fraud – particularly whiplash claims – continue to dog the industry.”
Average third party and theft premiums were also up 8.9% to £940.56, compared to the previous quarter.
The AA also said that accidental damage claims inflation was currently adding around £25 per year to the average quoted price.
David Brown, insurance partner at KPMG UK, added: “The cost of accidental damage is rising fast – and I believe it’s becoming a much bigger threat to motor policy price inflation than whiplash.”
Winners & losers
On personal injury claims, Lloyd stated: “The number of personal injury claims has started to show signs of slowing and the Ministry of Justice has embarked on fresh reforms to curb cold-call culture which contributes to Britain’s unwelcome status as ‘whiplash capital of Europe’.”
The index also revealed that all regions saw premiums increase apart from Northern Ireland where the average quoted fell by 3.0%.
AA said this still made the region the third most expensive region to insure a car.
The biggest climber was London, where quoted premiums rose 8.6% to just over £800, making London the second most expensive region to insure a car, after the North West where the average quoted premium is £887.35.
Scotland remains the cheapest region to insure a car which, after an increase of 5.5% has an average quoted premium of £458.75, the index highlighted.
article is care of www.insuranceage.co.uk and the original article can be found here