Car insurance premiums increased by an astounding 38.2 per cent in 2010 so how much will they increase by in 2011?
The recent average of car insurance premium is £695. This is about £200 more expensive compared to the average premium amount of the year before. The rise in third party, fire and theft insurance has increased by a substantial 56 per cent, an extra £322, during 2010. The rise over the year was triple compare to the rise in 2009.
The rise in premiums affects all age groups, not just young drivers. In fact, drivers aged 51-55 years old experienced the biggest rise in the fourth quarter of 2010. The main reason is because insurance companies are trying to gain money against the issue of older drivers fronting policies for their children in a desperate and technically illegal attempt at obtaining affordable policies for young drivers. 2010 was the worst year for car insurance premiums. There are many reasons why the cost increased so much in the year.
How much in 2011?
UK motorists are paying high fuel costs, worsened by the increase in VAT to 20 per cent and many households are striving with other higher living costs, cuts to benefits and job insecurity, so just how much more will they suffer in car insurance costs in 2011? However, moneysupermarket.com predicts that car insurance prices will increase by 20 per cent this year. This may be about half the rise of 2010, but it is still a huge annual rise.
Steve Sweeney, head of car insurance at moneysupermarket.com, stated: “2010 was the year of car insurance price hikes, largely due to the rise in personal injury claims that insurers have had to pay out for, as well as the costs incurred by uninsured drivers and insurance fraud. Unfortunately I expect that premiums will rise by a further 20% in 2011.”
Another factor that may impact the prices is the large amount of extra claims caused by the recent winter weather. During December there was a huge rise in claims and if we get another prolonged period of snow this will increase further and see car insurance premiums rise even higher in 2011.
It looks like there is little break for the stressed UK motorist in terms of car insurance premiums. The experts say that because of fraud, credit hire costs, personal injury claims and making up for unprofitable years the cost will continue to rise in 2011; it is just a case of how much. The most likely amount is that the average car insurance premium will rise by between 10 and 20 per cent in 2011.
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