Drivers Feel the ‘Premiums Pinch'

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by: MarkeD
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Date: Tue, 23 Mar 2010 Time: 5:45 AM
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A new Confused.com survey has indicated a surge in the cost of car insurance for drivers across the country - adding another unwanted burden on already stretched household budgets. Their new Car Insurance Price Index, conducted in partnership with EMB, looks at how changes in the market are affecting your pocket, and the results are startling.

So what did it find?

Overall, the average car insurance premium jumped up 12.8 per cent by the end of 2009 compared with the year before, bringing premiums to £504. This also compares to an increase of less than two per cent one year earlier.

For the over-25s, the increases have been, broadly speaking, larger the younger you are. The 26-30 age bracket was hit by the second largest price growth of any age group; paying on average 14.6 per cent more than they were at the end of 2008.

Women also saw consistently higher increases than their male counterparts in 2009 - very slowly closing the gap between genders. Indeed, the findings also suggest that women in their 40s can expect their insurance to rise by as much as 400 per cent if they add one or more teenagers to their cover.

Other groups seeing particularly sharp rises in car insurance costs in 2009 were those between 31 and 35 (13.8 per cent), 51 and 55 (13.2 per cent) and 66 and 71 (12.9 per cent).

The West Midlands saw the biggest overall increases in premiums in the last year at around 18 per cent - however, inner London was once again not far behind.

Meanwhile, it seems those looking to escape soaring costs should head north of the border, with the three smallest rises seen in East and North-East Scotland, the Highlands and Islands, and Central Scotland.

...and it gets worse

One thing is clear - prices are increasing across the board, and sadly there is no hiding place and experts are suggesting car insurance premiums could continue to rise.

EMB Partner, Karl Murphy, said: "Last year the average car insurer paid out £1.20 for every £1 of premium they received. Insurance providers have been badly impacted by rising numbers of injury claims, and with no signs of a reversal in this trend and negligible investment income available to them, further price rises can be expected."

This worrying suggestion is borne out by the figures, which show a rapid and dramatic rise that's unlikely to end soon. In the last quarter of 2009 alone, prices increased by 6.5 per cent - the highest quarterly increase in the three years covered by the motor price index.

Switch to fight off the price rises

Whatever your age, gender or location, it's becoming more and more important to ensure you're getting the very best deal on your car insurance. If you want tips to help you drive down the cost of your insurance, we've got a guide for that. Once you're ready to find a quote, start today by comparing prices to find the cover that best suits you.

About the Author

Drivers Feel the ‘Premiums Pinch' was produced by confused.com, the car insurance comparison website.