Car insurance premiums soar 20 per cent in last two years

Car insurance premiums soar 20 per cent in last two years

The average annual car insurance cover is £562 according to figures from MoneySuperMarket, representing a 20 per cent increase over two years.

Between April and June in 2015, the average premium cost £474, before rising to £511 in 2016 and then to £562 for the same period this year.

For those drivers with five or more years’ no-claims discount, they paid £347 on average between April and June, well below the average cost of £1,271 paid by drivers without the discount.

Men continue to face higher premiums on average, paying £85 more than women between April and June.

Location also plays a big factor in car insurance prices, with drivers in east London having the highest average premium at £1,166. Outside of the capital, the average car insurance is highest in Manchester at £859.

Despite a fall of £13, young drivers aged 17 to 19 years continue to face the highest average premium, of £1,322.

“These are grim times for motorists as far as their insurance is concerned,” said Kevin Pratt, consumer affairs expert at MoneySuperMarket.

“IPT (Insurance Premium Tax) rose again in June and now stands at a hefty 12 per cent of premiums, and the change to the Ogden discount rate for personal injury claims earlier this year has added to the inflationary pressure.

“It is to be hoped the Chancellor resists the temptation to push IPT higher in the autumn, but nobody would be surprised if he did.

“Likewise, we need to see the government come good on its promise to overhaul the way the courts deal with fraudulent whiplash claims, and it needs to keep its foot on the neck of insurance companies so that any savings that accrue are passed on to policyholders.

“Anyone renewing their policy in the next few weeks should be aware of how premiums have risen over the last few years, and should shop around to see what else is available.”

Rob Cummings, of the Association of British Insurers (ABI), said: “Drivers are bearing the brunt of a cocktail of rising costs associated with increasing whiplash-style claims, rising repair bills and a higher rate of IPT.”

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