Auto insurance premiums rose for the first time in 18 months, according to financial services firm Confused.
Data today revealed that insuring a vehicle costs £12 more than a year ago, taking the average premium up to £550 a year.
“Car insurance costs are starting to rise, and that’s mainly because we’re driving a lot more now than 12 months ago, and that means the number of claims insurers are paying out has probably gone up, too.” , commented the general manager of Confused, Louise O’Shea.
Even though current prices are the highest since the end of 2020, things could still get worse for motorists who stick to their renewal plans.
According to additional research, 42% of drivers who renewed their premium saw prices increase significantly.
Most motorists were also mistakenly convinced that regulations set in January by the Financial Conduct Authority (FCA) would mean their turnover would not increase.
Under the new set of rules, insurers must offer the same rate to new customers and old customers, removing the “discount for new customers”.
O’Shea explained that despite recent FCA changes, motorists could still see their premiums go up and that’s why they need to shop around for better deals.
“It is disturbing that so many people believed that the price changes that took effect in January would guarantee them a cheaper price, and I am sure they were quite shocked when they received their renewal notice and that ‘it was higher,’ she added.
“Prices have gone up, but it’s very likely that there will be another insurer who can offer a better price for the cover you need, as the market is more competitive than ever.”
Premiums could also increase following recent changes to the Highway Code, which places liability on insurers rather than users.
“This shift of responsibility to car insurers could in theory lead to higher car insurance premiums, as insurers could face a higher bill in the event of an accident, especially when vehicles are equipped with expensive technology. “said Josh Hughes, partner at law firm Bolt Burdon Kemp. .
“However, the proposed legislation allows car insurers to recover their expenses from the manufacturer or software developer once the injured victim is compensated.
“This should serve to limit any cost increases they face from self-driving cars.”