AA Insurance has found that average comprehensive premiums have risen to £971.40, an increase of £128.71 over a period of 12 months. The RAC, in a separate report, found that the average annual cost of owning and operating a car today is £1,556 higher than it was in 2007.
Taken together, these research studies indicate that car insurance has grown more expensive at a rate much faster than the 5.0 per cent current inflation rate, according to industry experts, which means that motorists already hard pressed to keep their cars on the road are presented with even more challenges. Fuel costs have also been increasing steadily alongside premium increases, leading drivers to spend an additional £160 annually on petrol, representing a 12 per cent rise over the course of a single year.
Making matters worse is the insurance cost increase, thanks to car insurance companies passing on their legal costs. Official figures report a decline in the number of road traffic accidents, yet the number of high-value accident claims for injuries sustained in traffic collisions has spiraled upward, leading to massive payouts on the part of insurers that need to be recovered from their customer base through rate hikes.
In addition to higher figures associated with legitimate accident claims, the insurance industry has also been battling increased fraud activity as well, with ‘cash for crash’ schemes growing in popularity with criminals out looking for ways to make some quick cash. Uninsured motorists also continue to be a source of consternation, as the insurance industry as a whole absorbs the legal costs of uninsured driving through the Motor Insurers Bureau.