A perfect storm of tax increases, higher vehicle repair costs and a proliferation of scams has significantly pushed up the average cost of car insurance in the UK.
According to several reports and studies in recent weeks, car insurance costs are universally rising. Sky News reported last month that average premiums now come in at £697 per year, with that figure set to rise comfortably over £700 by the end of the year. A separate report on This is Money, based on figures from Confused.com, already arrives at an average premium of £737. Older drivers are said to be experiencing the steepest increases, and at the other end of the scale, young 18-year old drivers are typically paying over £2000 for their insurance – a figure likely to exceed the value of their cars in some cases.
So what’s behind these stratospheric rises? First off, insurance premium taxes have increased. Meanwhile “higher repair bills” are also cited as a factor. But a significant rise in car insurance related scams is also very much to blame.
Car insurance scams are becoming increasingly sophisticated and go far beyond the spate of false whiplash claims that plagued the industry some years ago.
A report in The Telegraph discusses all kinds of scams affecting the motor insurance industry, both in terms of false claims and in the rise of new scams involving criminals selling fake or invalid policies.
The scams listed include:
The last two scams listed above are fairly new, but with prices rising, “ghost brokers” are moving in to capitalise on those keen to minimise an essential regular expense.
Undoubtedly, cynics will presume that insurance companies are making the most of all of this and boosting profits against a backdrop of several reasons to increase premiums. It would be naive to dismiss this as a possibility. Either way, however, there are some clear reasons why premiums are on the up – and there’s no reason to expect the trend to reverse any time soon.
Have you seen your premiums increasing, or been the victim of any of the scams described above? Share your experiences in our comments section.
IMAGE CREDIT: Geograph