Car Insurance premiums continue to rise

In the current economic climate, rising costs on a variety of goods are burdening the British consumers all over the country. One sector in particular, however, has been hit especially hard by rising costs, namely motorists. Recently, it seems that petrol prices are jumping to new highs on an almost weekly basis. As well as being hit hard in the wallet when filling up, escalating insurance premiums have seen drivers paying increasingly more for their car insurance.





Statistics have proved that car insurance is rising at the fastest rate ever recorded, with data revealing that car insurance premiums have shot up by 40% in the past 12 months. The average price of a policy in the UK now comes in at £892, with third party, fire and theft policies, usually taken out by high-risk younger drivers, now costing an average of £1,533.





These rocketing prices have created a vicious circle where insurance is simply unaffordable for young drivers. In turn this is resulting in an increasing amount of insurance fraud, with some motorists withholding information when taking out a policy or exaggerating personal injury claims to try to reduce their costs. Even more alarming is the UK's distinction of having the largest percentage of uninsured drivers in the European Union. Approximately 4% of the UK’s motorists are uninsured, rising to 11% in the London area. On a practical level, this has been calculated as costing an extra £30 on the policies of insured drivers, with accidents involving uninsured drivers costing the industry a total of £500m per year.

Drivers are not completely powerless and to help cut costs it may be worthwhile looking around for a new policy. Cost comparison sites exist that can make insurance shopping a relatively easy process. By shopping around and perhaps changing to a limited mileage policy, it may be possible to save up to a third on the cost of insurance.





Nevertheless, with the car insurance industry losing money for the past five years and reporting average losses of over 20% in 2009, it is likely that insurance costs will continue to rise, for the short term at least. Industry analysts have commented, somewhat ominously, on the fact that further increases are certain in 2011.





This will leave the hard hit UK motorist even further out of pocket. For this reason, it is financially prudent to drive in a safe manner. All motorists should try to stay focused and calm behind the wheel as "road rage" is one of the leading causes of car accidents. A recent survey revealed that four in 10 drivers involved in the 222,100 accidents on British roads every year say they were frightened or angered by other drivers in the moments before a crash or collision. Insurance costs are high enough without having to worry about the knock on cost of replacement car windows on your insurance after an accident.





Paul Buchanan writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.