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Huge car insurance change affecting millions of drivers could save you £100s – here’s everything you need to know
The new change could see you save on your insurance as several other changes are brought in to benefit British drivers
A HUGE insurance change affecting millions of drivers could save you £100s.
Car insurance premiums are set to decrease in England and Wales, in an unexpected move from the Labour government.
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It follows a report by the Government Actuary this week, in which it was announced that Personal Injury Discount Rates (PIDR) were changing from -0.25 to 0.5 per cent.
PIDR is used to determine the amount of damages that will be awarded in future pay-outs to injured individuals - including care and loss of earnings.
In turn, this is used by insurers to set their premium prices.
A higher PIDR means a lower cost of compensation.
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PricewaterhouseCoopers (PwC) said: “The interest rate environment has changed dramatically since 2019, meaning claimants should see the same returns now from investing a smaller lump sum as they would have done five years ago with a larger sum.”
Mohammad Khan, head of general insurance at PwC UK, explained that the increase in the Personal Injury Discount Rate should bring some consistency to “aspects of how motor insurance premiums and payouts are calculated across the UK”.
He added: “As for the insurance companies, they had expected a change of this scale and will already be pricing it into their pricing."
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The change under the new government marks the first time that a Government policy was changed in five years.
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A report from last month by the Association of British Insurers (ABI) showed that insurers £2.9billion for car insurance claims, which was 14 per cent more than last year when £2.5billion was paid out.
A spokesperson for the ABI told GB News: “The setting of the new Personal Injury Discount Rate is welcome and something that we have called on as part of our 10-Point Roadmap on Motor Affordability.
“The move to a positive rate reflects the improved investment market conditions since the rate was last set five years ago. We and our members firmly believe in full and fair compensation for claimants.”
MAJOR LAW CHANGES FOR DRIVERS
The Sun reported on the slew of decisive changes that are affecting British drivers this month.
In a huge move, car insurance premiums are predicted to fall by an average £50 in England and Wales.
PwC is predicting premiums will drop by 5 per cent
Advisory Fuel Rates (AFR) are set out by the government to assist businesses in reimbursing or being reimbursed for fuel costs of company cars.
Mileage rates apply when a company must repay an employee for business travel in a company car.
What is car insurance?
Consumer reporter Sam Walker talks you through what car insurance is and what it covers you for...
Car insurance pays out if your vehicle is stolen, damaged, catches on fire or is involved in an accident.
As a minimum, it protects you against any damage you case to other road users, the public or their property - these are called third parties.
You only need to claim on your car insurance when an accident is your fault.
If another motorist is to blame, their insurance should pay out instead.
Car insurance, unlike home insurance, is a legal requirement and if you don't have it you can be fined up to £1,000.
You can also have your vehicle seized and destroyed.
However, you don't need to insure your car if it is classed as "off-road", or holds a statutory off road notification (SORN).
The vehicle has to be kept on private land and not a public highway though.
These have been made 1p cheaper because there will be no added fuel benefit charge for employees using the company car for private travel.
Advisory rates won't have to be used if the employee shows they have covered the full cost of private fuel by repaying at a lower mileage rate.
It has also been ruled that all new public charge points for electric vehicles 8kW and above deployed after 24th November 2024 must offer contactless payment.
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The same goes for all public charge points of 50kW and above. This can either be via a public charge point or at a charging site.
Those who are non compliant could face a fine of up to £10,000.
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