Car insurance premiums have gone up by £110 in the last year – here’s how to cut your costs
The average cost of a premium has hit £781 per year, according to Confused.com - but here's how you can drive down your costs
CAR insurance premiums have gone up by an average of £110 in the last year, according to a new report.
More expensive repairs and government changes to injury payouts have pushed up the average annual cost by 16 per cent, Confused.com said.
Drivers now pay an average of £781 on comparison sites for a comprehensive policy in the year to march 2017.
It predicts that premiums could surpass £1,000 next year as they are set to hit record highs.
Amanda Stretton, motoring editor at Confused.com, said: “As the industry adapts to additional pressures... we could be on course to drive past the £858 peak we saw in 2011.
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“As car insurance costs continue to climb, average premiums could even break the £1,000 barrier by next year.”
Its data suggest that car insurance have gone up by 2 per cent - or £14 on average - since the last quarter, suggesting the amount drivers pay is on its way to peaking.
It blamed changes in the way that injury payouts are calculated, as well as increase in Insurance Premium Tax for the rises.
The government changed the so-called Ogden Rate for calculating lump sump payments to accident victims who suffer long-term injuries.
The move could increase costs for insurers by up to £3 billion, pushing up costs for millions of drivers.
At the time The Association of British Insurers (ABI) described the decision as “crazy”.
THREE SIMPLE WAYS TO CUT YOUR CAR INSURANCE BILL
IT pays to shop around for the best deal on your car insurance.
Here are five ways to cut your insurance bill right now.
NEVER autorenew. Rolling over your policy with your insurer means you’ll pay more than you need to. Shop around for the best deal using a comparison website and challenge your existing provider to match the best deal you find.
ADD an extra driver to your policy. It is illegal to claim someone is a main driver when the’re not, but adding a secondary driver can save you money without breaking the law. Ideally the second driver would be someone with a clear driving licence and good no-claims history.
PAY your premium in full. If you can afford to stump up the cash outright. Insurers usually whack on a hefty interest charge for monthly repayments so you can make a significant saving by paying upfront.
The Association of British Insurers (ABI) described the decision as “crazy”.
The Confused.com research, which is conducted with brokerage firm Willis Towers Watson, checks more than four million car insurance quotes.
Its figures are higher than the ABI, which found the average annual comprehensive policy cost £462 in the last three months of 2016.
But both reports have have said that premiums are increasing due to the rising cost of repair bills.
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