Spiraling Cost of Car Insurance

As the cost of motoring continues to climb, cash strapped drivers in theUKare doing everything they can to keep costs down, and one area of particular concern has been car insurance.

Figures released by the AA show that over the past five years the cost of car insurance has more than doubled. In 2008 the average comprehensive policy cost £481, and by January this year the same policy cost £971.The AA and other leading insurers blame the compensation culture as the biggest factor in causing this escalation in premiums.

According to research by Moneysupermarket.Com the number uninsured drivers is also   driving up the cost of car insurance by a staggering £500 million a year, which adds an average £30 per year to policies. The research found that 16% of drivers have been getting behind the wheel of a car they aren’t insured to drive. Breaking this down further, 8% say they have driven their own vehicle without cover and 6% say they have driven someone else’s vehicle without cover. The remaining 2% say they have driven their own vehicle without cover in between insurance policy renewals.

The rise in car insurance premiums is having a particular influence on young drivers, many of whom rather skip cover and run the risk of being penalised. Female drivers may be particularly hard hit by the end of this year, when a gender directive from the EU bans insurance companies from setting lower motor insurance premiums for women. This directive stipulates that insurers cannot discriminate on the basis of gender when setting insurance premiums, despite the fact that women drivers are less likely to have a crash and are involved in far less serious road accidents. The Labour transport spokesman, John Woodcock, has called on the Government to take action to mitigate the worst effects of the new ruling. He said that on average women would end up paying an additional £362 a year for their insurance.

One means of reducing your premiums as a young driver is to take your “Pass Plus” Certificate,  which can be obtained within the first year of passing your practical driving test.