Car Insurance Premiums Still Rising

Car insurance premiums have risen dramatically over the past few years, however the price rises seem to be slowing year on year.

The cost of insuring a car has risen substantially with the average comprehensive cover now standing at £835, a staggering £220 more than twelve months ago.

There is a sliver of good news for motorists, however, as insurance price rises are slowing down.

For example, the average price of a comprehensive car insurance policy rose by 3.8% in the first three months of 2011, compared to 7.1% in the final quarter of 2010.

The Confused.com/Towers Watson Car Insurance Price Index, which tracks car insurance costs also reveals that the average premium for third party car and theft policies now stands at £1,121 which have been increasing by over 50 per cent year on year.

“Our figures show that despite these rises, there are still good deals to be had. For example, younger drivers and particularly younger men using Confused.com experienced much lower than average premium increases during the quarter.”, says Gareth Kloet, Head of Motor for Confused.com.

Motorists should also look for other ways to cut the costs of car ownership.

It isn’t just an increase in the number of fraudulent claims and a rise in the number of “no win, no fee” personal injury cases that is forcing insurance companies to charge more for their car insurance, as Peter Lee of Towers Watson points out:

“The private car insurance market has had to keep raising prices to counter poor claims experience. The fact that the market has been virtually stood on its head so far in 2011 by the real and potential impact of increases in insurance premium tax and VAT, the European Court of Justice ruling preventing the future use of gender in pricing, and Government plans for addressing civil litigation costs makes it hardly surprising that many are taking stock of their position.”