Motor cost insurance increases have left drivers in the UK feeling even more vulnerable during a time when they’ve already been feeling financially constrained, industry experts recently said.
Car insurance rates have been increasing at record speed over the past few months, according to official industry figures. In total prices for even discount car insurance have increased by an average in excess of 30 per cent over 2010 levels, leaving consumers with a bad taste in their mouths.
Many motorists have been questioning whether car insurance companies are justified in raising their rates so precipitously. However statistics show that while inflation and insurance fraud have both impacted the industry, one of the major causes of increases to insurance premium prices is the rising incidence and cost of personal injury claims related to road traffic accidents.
Increased claims costs have been instrumental in contributing to a decade and a half of underwriting losses. The cumulative losses rose in 2009 to a total of £1.5 billion, and recent research indicates that an additional £80 is tacked on to the price of the average motor insurance policy in the UK.
Estimates also indicate that one out of every 20 cars on the road in the UK is driven by an uninsured driver. Claims involving uninsured motorists were responsible for an additional £30 to the premium price of every motor policy in the UK.
Based on these findings, increases to premium prices will persist as a market feature for the rest of the current year. These increases are primarily driven by injury claims with exorbitant costs and increased insurance fraud levels, and are not the result of insurers simply lining their pockets with cash collected from their customers.