Rates for young drivers could top £3,000 a year, experts say

CAR INSURANCE NEWS ROUNDUP: WEEK ENDED 9 JAN 2013:

Car insurance rates for younger motorists could rise to figures as high as £3,000 a year – or even more – based on the warnings of car accident claim experts.

This week, it was revealed that car insurance companies may be planning to increase rates by as much as 15 per cent this year and perhaps another similar increase in 2014 as well. Such an eventuality will be absolutely disastrous for younger motorists, as cheap car insurance for young drivers is already a complete impossibility, what with the average annual quote for anyone 21 years of age or younger is already £2,537, according to the AA.

Meanwhile, these rate hikes could easily push this figure up and over the £3,000 a year price point for young drivers, based on their statistical likelihood to be involved in car accidents due to their inexperience. However, drivers of all ages will experience rate hikes as well, estimated to be as ‘little’ as £40 or as high as £120; the current average for a British motorist is already £1,219 per annum when it comes to their motor car insurance costs.

However, the absolute worst off will be young female drivers, especially in light of how the European gender equality directive that went into effect in December of last year raised rates by an average of £300. Apparently charging young women less on their insurance than their male counterparts, based on the fact that these women are statistically less likely to be embroiled in costly and dangerous accidents than men of the same general age, was somehow ‘discriminatory’ towards men – so this means that responsible female drivers are not only being penalised for being low risk motorists but now have to deal with even more rate increases both this year and possibly the next as well!

So what’s driving this newest spate of rate increases? Well, the insurance industry blames the courts for awarding compensation awards that call for long-term regular payments, which have been both adding to the drain on an insurer’s coffers and causing their underwriters to make it more costly for an insurance company to operate – of course, the only ones who are truly suffering in this case is anyone who tries to keep a car on the road in this day and age!

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