Confused.com research has revealed that car insurance prices rose by 38.2% during 2010, taking the average premium paid across all age groups to £695. The percentage increase was more than triple that of 2009. Third party, fire and theft (TPFT) customers fared even worse, facing an annual increase of 56.3%, the equivalent of an extra £322, meaning the last refuge for young drivers looking for cheap car insurance and to cut costs seems to have been compromised.
Despite it being the subject of a Parliamentary Transport Select Committee, the last two quarters have not been the hardest on the 17 to20 year old age group. In fact it’s 51 to55 year olds who have been hit with the biggest rise during the year.
The rises in the older age bracket, who have already been affected by wider budgetary changes, will hit this group hard. Parents adding children to their car insurance policies as named drivers account for the bulk of the increase that this group has seen. The immediate issue seems to be insurance providers getting increasingly wise to the issue of fronting*. Men adding a child to their policy saw rises 11% above the average.
Regionally Manchester/Merseyside saw the fastest rising prices over the past year. An 11% increase during quarter four brought the annual increase to 49%, 10% above the UK average.
Will Thomas, head of motoring at Confused.com said, “Whilst costs are undeniably still rising, there is evidence that the rises are starting to lose momentum. Despite the hefty annual increases, price rises declined for the second quarter running. Comprehensive policies rose by an average of 6.9% between October and December with TPFT ones increasing by 9.2%.
“The investigation into insurance costs for young drivers is a clear sign that escalating costs and their implications are being taken seriously, but it seems there is no light at the end of the tunnel just yet. The rise in Insurance Premium Tax and rising fuel costs will continue to challenge people financially.”
The only way for households to tackle spiralling costs is to make sure they getting the best value and best fit policy by shopping around.
“Insurers have been carefully managing a juggling act between the need to address underlying profitability and maintaining competitive prices which explains the trends we have seen particularly in the second half of the year,” noted EMB partner, Peter Lee.
-ENDS-
Notes to editors
* Fronting is the practice of making an experienced driver the policyholder even though they are not the main user of the car in order to obtain cheap car insurance.
About Confused.com:
Confused.com is one of the UK’s biggest and most popular price comparison services. Launched in 2002, it generates over two million quotes per month. It has expanded its range of comparison products over the last couple of years to include home insurance, travel insurance, pet insurance, van insurance, motorbike insurance, breakdown cover and energy, as well as financial services products including credit cards, loans, mortgage deals and life insurance.
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