Why is my car insurance premium going up?


There have been many recent news reports about motor premiums rising over 2017 and this is expected to continue well into 2018, adding more pressure to the finances of motorists.  Current data suggests average increases of £50-75 per comprehensive policy with higher increases for younger and older drivers!*

*Source: Mohammad Khan, UK general insurance leader at PwC

What is driving premiums up?

Increases to Insurance Premium Tax

The government changes to Insurance Premium Tax over the last few years have meant that IPT has doubled from 6 to 12% over 2 years.  The most recent increase on the 1st June meant that IPT has risen from 10% to 12%, overall adding a hefty extra to premiums. There remains speculation this could increase further in the future.

Changes to the Ogden Discount Rate

In February, Liz Truss Lord Chancellor, announced a change to the Ogden Discount Rate.  This discount rate is used to calculate compensation amounts for personal injuries. In simplistic terms insurers are likely to pay considerably more out for certain claims – so they are needing to collect  more in motor premiums.

 

Top Tips to reduce premiums:

  • Dash Cams

Dash cams are now more widely used and can be useful if you are involved in an accident to provide evidence that it was not your fault and help to protect your no claims bonus.

Some insurers now also offer a discount if you use a dashcam.

Some people are surprised to discover that fully comprehensive cover can often be cheaper than third party, fire and theft cover so this can also be something worth looking into at renewal time.

If you have any questions then please do not hesitate to drop us a line and we will be happy to help

mail@cj-insurance.co.uk

01432 268 007

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AUTHOR: Helen Clarke

DATE: 23rd June, 2017