Car insurance on track to be ‘the most expensive’ EVER as premiums soar by £100 in FOUR months
Gender gap widens as men are charged more for car insurance with experts predicting average will top £1,000 next year
ROCKETING car insurance premiums are expected to speed past all-time records in the coming months.
Annual prices are now just £11 short of the most expensive in history, recorded in 2011, and have shot up by £100 in the last four months.
According to Confused.com's insurance price index drivers are paying an average of £847 a year - a near 20 per cent increase from 12 months ago.
And experts are predicting average prices could top £1,000 by 2018.
Men are being hit hardest with the gender gap widening to £120 a year - just £1 shy of the gap before the EU introduced a directive to stop the sex divide.
Rules prohibit insurers assessing risk based on gender but other factors like car choice and job mean men now pay £901 a year compared with £781 for women.
Regionally all areas are feeling the effects with 11 regions – including the East of England, South of England and West of England – all paying the highest premiums they ever have.
And while younger drivers continue to pay the most for insurance, those aged between 25 and 42 years old and 54 and 70 years old are paying record amounts.
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Increases can be attributed to a raft of rule changes over the last few years.
Amendments to the Ogden Rate – the calculation used for personal injury payouts – added £3billion to insurers’ cost which were passed onto motorists.
Personal injury payouts in the UK are also 17 times higher than in other EU countries.
Bogus whiplash claims driven by claims management companies and laws on who foots the bill for compensation mean insurers are having to pay out millions in claims.
Tips for cutting your insurance premium
- Choose the cheapest way of paying. If you can, avoid paying by installments as some insurers add interest to your repayments.
- Opt for a bigger excess. Most policies have a compulsory minimum excess, the amount you pay in the event of a claim. You could reduce your premium by increasing the 'excess' - but you will have to pay more if you have an accident. Just make sure you can afford this sum should the worst happen.
- Avoid small claims. If you make a claim, you'll push up your insurance premium, as you will lose some or all of your No Claims Discount. For minor incidents, this can cost you more than you get back from insurers paying your claim. However, you must report any accidents to your insurer even if you don't plan to claim.
- Give your insurer full information. Don't forget to tell them about things that will make you more attractive to insure. For example, let your insurer know if you're doing less annual mileage.
- Invest in security. Most cars now come with alarms and/or immobilisers but if not, fitting one may lower your premium.
- Consider telematics or fitting a black box in your car. This allows you to pay a personalised price based on how and when you drive, so the safer you are, the less you pay.
- Try pay-as-you-go insurance. You're usually charged per mile driven, so this might be worth at a look at if you don't rack up too many miles.
- Add another driver. Adding a more experienced parent or partner or spouse to your policy can reduce the cost - but you must be careful not to mislead insurers about how the car is used.
- Go easy on the modifications. Adding spoilers or alloy wheels will mean higher premiums.
- Garage your car. Some insurers will give you a discount if your vehicle is locked away overnight.
- Insurance for older drivers. Several insurers specialise in offering cover for older drivers, typically from age 50 and over.
- Stay within the law. Adding penalty points to your driving licence pushes your premiums up. Insurers won't cover you if you drive under the influence of drink or drugs.
Insurance Premium Tax (IPT) has rocketed over the last two years, too, up from six per cent to 12.5 per cent.
These alterations have have meant since 2013, insurance premiums have risen by a THIRD.
Amanda Stretton, motoring editor at Confused.com, said: “We cannot say that we’re shocked by these figures, as following the Ogden Rate cut and hike in IPT, we knew drivers would be taking a hit.
"Worryingly, there is every possibility that car insurance prices will be the most expensive on record by the end of the year."