Car insurance increase hits young drivers hard
Car insurance premiums soared in the second quarter of 2010 after insurers passed the cost of a torrid year on to beleaguered consumers. The Confused.com/EMB Car Insurance Price Index showed that the average cost of comprehensive car insurance rose by 14.2 per cent between April and June, meaning a huge annual increase of 31 per cent.
The rise was put down to drastic losses from insurers, whose 2009 financial results showed an average of £122 in costs for every £100 of premium received. Because of this, the average cost of a comprehensive policy was £599 in the second quarter of the year - a £74 increase on the first three months of the year.
Confused.com product director Simon Lamble said: "This is a massive blow for motorists who have already suffered at the hands of petrol price hikes and insurance premium tax increases, and unfortunately we do not think we've seen the worst of it."
While the last year has clearly hit drivers' pockets hard, EMB partner Peter Lee agrees that further pain is on the way.
"We would anticipate more gradual rises in the remaining two quarters of 2010 but insurers should still be looking to achieve additional increases over the year," he said.
Lee continued: "As well as making up for current deficits in prices, insurers are suffering from continuing third party injury claims inflation and it is also likely that premium increases will affect the demand for ancillary products."
More pain for young drivers
As ever, young drivers have been hit hard in the past year - while 17-20 year-olds didn't see the highest percentage increases during the period, they still suffered a hefty 31 per cent rise. That took the average premium to £1,884; around three times the overall average.
It was young men who were hardest hit yet again, with a male driver under 21 paying a whopping £2,596 a year - almost £800 up on when records began at the end of 2006.
The youngest motorists weren't the only ones to be hit, however. Those between the ages of 21 and 25 saw prices spiral upwards by more than a third over the course of the year, taking the average premium over the £1,000-a-year mark for the first time.
Which car costs the most to insure?
This most recent data looks for the first time at which car types suffered the biggest price rises, and if you're the owner of a 3-door hatchback you might want to look away now.
According to our figures, owners of this type of car have seen their premiums increase by a massive 34 per cent over the last year.
Remarkably, that makes them more expensive to insure on average than a convertible, and the second most expensive car type behind a coupe.
Top tips to cut the cost of insurance
At a time when the price of insurance is rising so rapidly, it's important to do what you can to drive that cost down. Here are some top tips that could really help you save:
* Get discounts on your premium by taking extra safety precautions such as fitting an alarm and immobiliser.
* Choose a car with a smaller engine, as bigger and faster vehicles cost more to insure.
* Avoid vehicles with any modifications from the standard manufacture.
* Make savings by reducing your mileage or by only driving at certain hours of the day.
* Take the Pass Plus qualification to benefit from a reduction of up to a third on your premium.
* Consider lowering the price you pay by opting for a higher excess - but be sure you can still afford this amount in the event of a claim.
About the Author
* Compare car insurance with Confused.com - between January and June 2010, 10 per cent of car insurance customers that gave a best alternative price saved over £188.85 by the confused.com website.
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