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Car insurance premiums are higher in the UK and THESE drivers face larger bills | Cars | Life & Style

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Car insurance bills are rising five times faster than inflation, which has seen the average annual bill hit £755, according to new research from Consumer Intelligence. 

According to the research, average premiums rose by 14.6 per cent in the past year, which is five times the rate of inflation at 2.9 per cent. 

Despite this, the rate ion inflation has slowed somewhat over the past three months as the Government looks to reform the Ogden rate. 

The Ogden rate sets pay-outs for major personal injury claims and was changed earlier this year, which saw premium prices increase by £75 on average. 

Older drivers were most affected by the change with average premiums for over-50s rising by 16.5 per cent in the year to September. 

Despite this, over 50s still have the lowest average premiums of £434 in the UK.

Premiums for under 25s rose by 11 per cent but their average policy cost was £1,719. 

Drivers in London and the North West of England face the highest annual bills at more than £1,000 a year – nearly double the £518 average in Scotland.    

Average motor insurance premiums have increased by 32.2 per cent since October 2013, Consumer Intelligence estimates. 

John Blevins, Consumer Intelligence pricing expert said: “Prices are stabilising but the future is unclear with the new Ogden rate, whiplash reforms and the possibility of another Insurance Premium Tax rise in the Budget.

“Car insurance claim costs have increased in the past three months, partly because we are driving more technologically advanced cars which cost more to repair, but also because the weakness of the pound means the cost of parts is rising.

“Older drivers are being hit with higher premiums because they are driving for longer and consequently becoming involved in more accidents.”

Younger drivers are benefiting from telematics bringing average costs down – 65 per cent of the most competitive prices for under-25s come from telematics policies, and one in five of all best buy quotes.

This has resulted in prices for younger drivers are still slightly lower than in 2013.

Telematics can still reward good driving behaviour can also benefit older drivers with 11 per cent of the best deals for those aged 25-49 and seven per cent for those over 50 taking out these policies. 

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