Motorist are having to pay more for car insurance than ever before, the Association of British Insurers confirmed today.
The average motor insurance premium has reached £485, an increase of £45 in the last 12 months and the highest it’s been since the ABI has been tracking prices.
The blame has been put on changes to personal injury payouts and tax and insurers have now called for the Government to bring in reforms to compensation rules as quickly as possible to relieve ‘cash-squeezed’ motorists.
Motorists are being stung by the highest insurance costs on record: The ABI said the average premium was £485 in the third quarter of 2017, which is partly down to increasing repair costs
Today’s report is a second blow for drivers in a week after the RAC Foundation confirmed that close to a third of Britain’s 40 million motorists have been hit with some form of fine in the past 12 months, amounting to a staggering £1 billion.
With changes to VED car tax in April and the introduction of new toxin taxes on older cars, the nation’s motorists are facing other higher charges to get behind the wheel.
Record high insurance costs are the latest blow to their wallets, with the average policy now 10 per cent more expensive than it was this time last year.
The ABI said its Premium Tracker measured the highest average motor insurance premium for the first time since it has been reporting on costs, which began in 2012.
The £485 figure for the third quarter of 2017 – which unlike other insurance price indices is based on the actual cost of policies rather than quoted fees – broke the previous record by just £1 – this was set in the previous quarter.
The insurers’ association blamed the
12 per cent rise in Insurance Premium Tax (IPT) in the last two years two years, as well as soaring average repair bills, which have jumped by a third since 2013.
Highest on record: Average car premiums have been on a gradual increase since the beginning of 2015, ABI figures show
Motorists are already facing higher tax costs, surcharges for driving older cars and more penalty fines – the record high cost of insurance is yet another blow to the nation’s drivers
It has now urged the Government to implement its proposals to reform the Ogden rate, which defines severed personal injury payouts, as soon as possible to lighten the financial load on drivers.
Rob Cummings, head of motor and liability at the ABI, said: ‘The UK Government’s proposals to deliver a personal injury compensation system that is fair for claimants, customers and taxpayers alike should help ease the pressure on motor insurance premiums.
‘We urge the Government to publish a framework and timetable for making these reforms a reality so that we have in place a system that provides full compensation to claimants and benefits insurance customers, as well as other compensators like the NHS.
‘And in the forthcoming Budget, the Chancellor must resist any temptation to further increase the rate of Insurance Premium Tax.’