Has Car Insurance Gone Up Uk

Has Car Insurance Gone Up Uk – Young drivers are hit hardest by the highest cost of car insurance, with some facing premiums of almost £3,000, according to the figures.

Confused.com, a price comparison company, said insurance for 17 to 20-year-olds has risen by more than £1,000 on average compared to the same period last year.

Has Car Insurance Gone Up Uk

Steve Dukes, managing director of Confused.com, told Radio 4’s Today programme: “The number of claims has increased over the years since the disaster, but so have the costs.”

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“The cost of used cars is higher than ever, the cost of parts, the cost of labor for repairs – all of that is passed on to the consumer.”

The price of used cars – the first car for new young drivers – has fluctuated in the months since the start of the Covid epidemic. Demand for used cars has risen after production of new cars fell due to global shortages of computer chips and other equipment needed for production.

According to the National Statistics Service, the price growth of the used car market increased by 31% in March 2022. Since then, it has decreased significantly.

However, the biggest jump was in young drivers. The price of a 17-year-old rose from an average of £1,423 to £2,877. The average cost of insurance for 18-year-old drivers was £3,162.

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The data is based on the average of the top five quotes found on Confused.com, not the actual price paid for the policies.

Mr Dukes said there were ways to reduce fees. “If they can legally share a car with an older and more experienced driver and add that person to a reputable driver, it could make a really big difference and bring the price down by hundreds of pounds, it’s definitely worth looking at,” he said. said. .

Mr Dukes also suggested young drivers explore telematics or pay-as-you-drive insurance, where their behavior on the road is reported to the primary insurance provider or sometimes the driver’s insurance.

But he said that as the cost of driving for 17- to 20-year-olds increases, many of the younger drivers will re-evaluate their ability to drive.

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“The industry needs to be careful not to push young drivers into other modes of transport and that’s a real risk when prices are so high,” he said.

The Association of British Insurers (ABI) says that although car insurance can be expensive, there are ways to cut costs.

He added that it is important that motorists never drive without insurance and urged anyone struggling with the costs to speak to their insurer.

However, the ABI said insurance is always based on risk and its data showed average costs and incidence of claims were higher among younger drivers, which could affect premiums.

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According to the ABI’s analysis of 28 million policies, motorist insurance costs rose by an average of £561 between July and September, a 29% increase compared to the same period in 2022.

The association said the figures were based on the price consumers paid for the insurance policy, not the quote.

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November 6, 2024 Are headlights really blinding drivers? The device is installed in a special vehicle to measure the intensity of the incoming light beam. 6 November 2024 Across the industry in England, the process creates hidden costs worth up to £750 million, equivalent to around 5 per cent of the UK’s 34 million car insurance claims each year:  

Every motorist in Britain is missing out on car insurance as insurers use secret deals to inflate repair bills, an investigation has found.

It is clear that insurers routinely increase the cost of repairs by up to 100 percent and receive an undisclosed refund for the difference.

The system is used by insurers representing drivers involved in accidents that were not their fault to cut out competing companies representing “at fault drivers” for repairs.

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Across the industry, the system creates hidden costs that could affect all drivers and could be as much as £750 million, equivalent to around 5 per cent of the annual insurance premiums of the UK’s 34 million drivers.

Car insurance prices have reached an all-time high this year, with the average cost of comprehensive insurance now sitting at £462 a year.

For years, the industry has blamed rising costs for hit-and-run insurance, higher taxes and reckless young drivers.

In response to the newspaper’s findings, the British Insurance Association, which represents Britain’s biggest companies, refused to deny that maintenance costs and hidden discounts could also be a factor in raising premiums.

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The ABI said insurers used the system to control claims costs and argued that companies should not have to offer discounts to rivals, but admitted it could “work better”.

Given that the Competition and Markets Authority investigated similar practices in the industry in 2012 but decided not to take action on repair costs, it is understood that almost all UK car insurers have a repair reimbursement scheme. ah.

Keith Malthouse, a Conservative MP who sits on the finance committee, said: “This looks like exactly the sort of abusive behavior that the Prime Minister wants to stamp out.”

I intend to put this on the board’s agenda when they meet in September, and I hope that the CMA will take a long, hard time to address whether it is in the best interest of the consumer. “

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Wes Streeting, a Labor MP who is also on the committee, added: “This is appalling practice and drivers are paying the price in their insurance premiums. Insurance companies should take responsibility for this.”

James Daly, Fairer’s finance director, described the practice as “anti-competitive” and warned it would continue without regulatory intervention.

“Many insurers know it’s wrong, but they can’t push back on their own,” he added.

Jason Moseley, CEO of the National Automobile Association, which represents auto repair companies, said: “Insurers say they’re giving us labor market rates, but because they force repairers to pay a huge discount, those rates are distorted. . . It should be investigated immediately.”

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Documents from three insurers show that car insurers deal with no-fault claims regularly paid by rival companies that represent “at-fault” drivers who greatly overestimate the cost of repairs.  

According to pre-negotiated pricing agreements, repair companies that work for “regular” insurers are charged an inflated “sale-only” rate for work charged for the “at-fault” category. Once the payment is made, the repair companies will reimburse the insurance in the event of non-compliance equal to the difference between the invoice price and the actual price of the work.

Last year’s documents show AXA ordered the repair shop to charge “regular” customers 54 percent more than the prices paid by other customers.

For “prestige cars” including Audis, Mercedes and BMWs, “ordinary” customers were paying 100 percent more than the norm.

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Insurance Co-operatives in 2017 show they are ordering auto repair companies to charge “regular” customers 63 percent more than regular jobs.

The 2016 documents also show that Ageas regularly receives a 20 percent refund of invoiced labor costs.

Meanwhile, an insider told this newspaper that another of Britain’s biggest car insurers launched an initiative called ‘Project Max’ in 2012 which aimed to make millions of pounds in extra profits. and white. An executive at another insurance company, who spoke on condition of anonymity, described the system as “disgraceful”.

A spokesman for the ABI said: “It is common for car insurers to agree on what is effectively a significant discount to car repair companies, this is not new, in line with other industries that use economies of scale and help control claims costs.” which is beneficial to customers.

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“If an accident occurs and the general insurer first pays for the repair, it is under no obligation to pass on the discount to its competitors if they claim compensation from the insurer.” The