The average price of comprehensive car insurance slightly increased in the second quarter of 2016, but it noticeably rose year-on-year, the Association of British Insurers (ABI) has reported.
According to ABI’s latest figures published on Monday, average premium paid from April to June was £434, an increase of £5 or 1% from the previous quarter.
The ABI said the average premium paid in the second quarter was £39 or 10% higher than the price recorded during the same period in 2015.
“These continue to be tough times for motorists,” said Rob Cummings, ABI general insurance manager.
Cummings said that the highly competitive market has enabled motorists to shop around for the best deal.
However, cost pressures on premiums – which are caused by the government’s Insurance Premium Tax (IPT) hikes – and the rising overall cost in lower value personal injury claims “are feeding their way through into higher motor insurance premiums.”
“With a further increase in Insurance Premium Tax effective from last Octo
ber, it is imperative that the Government pushes ahead with proposed reforms to tackle the compensation culture by limiting compensation for low value whiplash claims, so that savings can be passed onto consumers through lower premiums,” Cumming said.
Two weeks ago, another industry body – the British Insurance Brokers’ Association (BIBA) – urged the government to provide a tax break for telematics-based insurance products after car premiums reached their highest levels in six years.
BIBA’s latest insurance price index recorded a 15% year-on-year increase in car insurance premiums with the addition of IPT.
Meanwhile, price comparison website Confused.com and Willis
Towers Watson reported a £115 or 19.2% increase in car insurance prices, the biggest surge since 2011.
Brokers call for tax break as car premiums hit 6-year high
Car insurance premiums rise, seen to surpass record levels
7 million UK drivers lie to get cheaper insurance: Survey