Motorists are finding it more difficult to maintain vehicles with the rising cost of fuel and insurance premiums. This article discusses the statistics and ways of reducing your insurance costs.
Car insurance premiums have risen by 40% in the last 12 months which is bad news for motorists. According to the AA British Insurance Premium Index the typical comprehensive car insurance premium is now approximately £892.
While this premium is quite high, young drivers aged 17-22 have taken a bigger hit. Premiums for this age group have increased more than 64% over the last 12 months. A typical premium is now £2,430. Premiums for Third Party, Fire & Theft (TPFT) have also increased by a huge amount – 82% over the last 12 months. The average TPFT premium has risen to £1,532.62.
The fluctuation of premiums is recorded across the UK, by the index, for 2,800 car insurance customers. An increase in fraud and injury claims is cited as the reason behind the increase in premiums.
Car insurance premiums have been increasing for some time but industry experts say that insurers are still operating at a loss despite the large increase in premium rates.
Ian Crowder of the AA has stated that insurance has been an unsustainable business for many years. According to Crowder insurance claims have exceeded premiums by 22%.
Driving is becoming more and more unaffordable due to record amounts in costs of fuel and rising premium rates. Simon Douglas, director of the AA, says that higher driver costs are “leading to more people withholding information when taking out a policy or exaggerating personal injury claims to try and reduce their costs. But this simply piles on costs for insurers and results in yet higher premiums for honest motorists.”
Swiftcover.com has done research regarding households that have more than one car. This research indicates that these households could be paying 29% more by purchasing multi-car policies which allow more than one vehicle on a single policy. According to swiftcover.com research, single policies may be a better benefit for multi-car households.
Multi-car households have accepted the idea that your premiums are lower when you have a multi-car policy with some insurers offering discounts of up to 30%.
The motor director at swiftcover.com, Sarah Vaughan, negates the idea that multi-car discounts offer the best value. While these discounts are good for many households it isn’t the case for everyone. Having multiple cars under one policy is easier but multi-car households need to decide if paying hundreds over the odds is worth it.
A new law which will take effect December 2012 will turn the insurance industry on its head. Insurers will no longer be able to consider gender as a risk factor when determining insurance premiums. The insurance industry will have to radically change how insurance policies are priced. This radical change will raise the premiums of women under age 25 by up to 25% according to the Association of British Insurers (ABI).
Despite the rapid rise in premium costs there are ways that will help reduce the amount you pay.
- Don’t buy sports cars or vehicles that have a powerful engine. According to statistics these types of vehicles have a high accident rate.
- Add alarms and steering locks to your car for better security.
- To reduce the risk of theft, park your car in a garage.
- If you are under age 25 consider adding an experienced older driver to your policy. Just remember that listing someone else as the main driver of the vehicle is considered fraud.
- Shop around and get as many quotes as possible when looking for a new insurer.
- Instead of paying your premiums monthly, pay a lump sum.