Personal injury claims key in rising car insurance rates

Even though the number of road traffic accidents occurring on roads in the UK have been on the decline, an increase in both the cost and the volume of personal injury claims has been revealed to be key in rising car insurance rates, experts say.

Car insurance companies have been valiant in their efforts to reduce instances of insurance fraud, as doing so will result in not just reduced costs for insurers but also reduced premium prices for honest motorists.  Much has been done in order to curb spurious compensation claims, such as the Continuous Insurance Enforcement instituted last year and the recent launch of a police unit dedicated to insurance fraud, yet the problem is still causing discount car insurance quotes to be thin on the ground for many.

The second half of last year saw premium price hikes begin to taper off as insurance providers began to close the gap between the cost of insurance claims and their income from premium payments.  However, the vast majority of insurers in the UK are still posting massive underwriting losses, resulting in depleting their reserves, with many industry experts predicting a modest rise in premiums once again by the middle of 2012.

2012 brings even more changes to premium prices, especially since the European Court of Justice has ruled that gender cannot be used as a method for assessing motorist risk from December of this year.  This means that every insurer will need to either radically redesign their risk assessment protocols or raise premium prices for women – who have been statistically proven to be safer drivers than their male counterparts – by as much as 40 per cent in order to comply with the ECJ ruling.

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