According to the Automobile Association (AA), motor insurance premiums are up 16.3 per cent from this same time last year. Drivers are paying almost £82 more for motor insurance than a year ago, and they aren’t likely to see a reduction any time soon.
Whilst some reports have suggested that advances in technology are to blame for the increase in premiums, the AA blames the increase on continuing problems with whiplash claims and the growing tendency of consumers to shop around for new policies each year.
The insurance premium tax (IPT) hike that was announced on 23rd November isn’t helping matters either, as its 2 per cent increase means that drivers will see a 12 per cent IPT added to their premiums on 1st June 2017. This could add around £15 a year to the average motor insurance premium, according to insurance industry estimates. Younger drivers could especially be hit by the most recent IPT hike, with average premiums for those under the age of 25 potentially rising by £35. (more…)