Drivers across the country have been amazed by how far and how quickly petrol prices have dropped over recent months, being able to fill up with petrol for just 107 pence per litre. Some young drivers won’t ever have seen prices fall below 120ppl, and older drivers probably never expected to see such good prices again. However, as can be expected, there is a slight catch marring the wonderful landscape of low fuel costs, which is catch is rising insurance premiums.
The final three months of last year saw insurance policies in Britain rise by an average of £12, a 2 per cent rise. This put the average policy up to £594. Stephen Jones, an analyst with Towers Watson, has been reported the linking of the two changes in cost.
“Logically, insurers might expect more accidents and more claims” because of an increased rise in traffic and national mileage. Why would the traffic and national mileage rise? Petrol is cheaper and people can more readily afford to travel around and drive further.
There was also an increase in the amount of cars on the road towards the end of 2014, with approximately 525,000 more cars registered than at the same time the year before.
This adds up to an estimated 77.9 billion miles driven in the three months to the end of September 2014.
This all means that crashes are more likely, and increased the chance that insurers would have to pay out for damages. It is said that this increase is what led the insurers to raise the prices of their policies.
Of course, for some people, an average raise of £12 to their policy may be a fine price to pay for cheaper fuel, especially if they use their cars a lot. But of course, others may be vexed by the higher prices on their premiums.