UK car insurance premiums increased by 40%
UK car insurance users have certainly felt the drastic 40% increase in premiums over the last year. Read this article to learn the causes of it.
UK motorists have faced something that can easily be called as the most dramatic rise in insurance premiums over the past couple of decades. According to various sources the increase accounts about 40% in general over the past 12 months, but for certain car owner groups the increase has been even more dramatic. For example, drivers aged between 18 and 22 are now charged with 64% higher premiums than they were only a year ago. Such a catastrophic tendency has put many motorists under severe financial pressure and generated a lot of debates regarding the nature of such rate trends.
The Association of British Insurers (ABI) has taken on an active role in ruling out the situation and explaining the nature of such an odd increase in British auto insurance premiums. First of all the ABI calls for total ban on referral fees, which are used to provide information on potential personal injury claimants to claims management organizations and respective solicitors. Coupled with the old no-win-no-fee rules that were recently announced to be reviewed this all leads to a massive increase in legal costs across the entire industry. And that in turn has forced the insurance companies to adjust their premiums at such impressive rates just in order to keep the business profitable.
In average a typical comprehensive policy now costs around 900 pounds whereas third party, fire and theft will costs you a staggering 1,500 pounds. Such an odd tendency of usually cheaper policies with less coverage to cost more than comprehensive policies is explained by the vast popularity of this auto insurance type among high risk drivers such as younger males, for whom fully comprehensive policies would be even more expensive than the average rates.
UK auto insurance experts all agree that such an unprecedented increase in premiums will negatively affect the drivers' willingness to purchase new policies or cash out for additional coverage options. As for the forecast regarding the future trends of auto insurance rates, most experts claim that premiums will continue to rise but not as dramatically as during the last year unless there will be legislative measures taken to prevent such evolution of legal costs in the future. But as we all know, this will certainly take too much time to affect our current premiums anytime soon. So there's nothing left to do but to cope with the increased costs of insuring a vehicle or sell the car and switch to cycling.