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Premiums rise again thanks to car insurance premium tax

But you can still save with Tempcover!

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Have car insurance premiums gone up?

Annual car insurance premiums have risen by an average of £110 in the last 12 months according to insurance comparison site Confused.com*. Thanks largely to car insurance premium tax rises and increased compensation payout changes, drivers will now pay 16% more for a comprehensive annual policy then they did a year ago.

Confused.com has warned these increases are set to continue in the coming years as insurance companies face a range of new pressures. From the new compensation rates to an increase in Insurance Premium Tax (IPT) to the ever-growing cost and complexity of repairing and replacing car parts, it appears that annual insurance will only get more expensive for drivers.

Recent changes have been made to the way in which injury payouts are calculated, also known as the Ogden Rate. The new rate at which payments to accidents victims are calculated has put ‘huge pressure’ on insurers and it’s motorists who will have to foot the bill.

“As the industry adapts to additional pressures… we could be on course to drive past the £858 peak we saw in 2011. As car insurance costs continue to climb, average premiums could even break the £1,000 barrier by next year.” – Amanda Stretton, motoring editor at Confused.

The biggest rise in premiums came in the Scottish Highlands which saw premiums increase 21% in the past year, while unsurprisingly London drivers still pay the most for their cover at an average of around £1,500 a year.

How to save money on your car insurance?

With annual car insurance prices not about to drop anytime soon and car insurance premium tax to be on rise, it’s important to find savings any way you can. When looking for your next insurance policy why not try these few tricks to help bring the cost of your cover down slightly.

Compare prices

It’s the easiest and quickest way to save money on car insurance. There are hundreds of places to compare online and it usually takes just a couple of minutes to save tens if not hundreds of pounds.

Not only could you get a better price but by comparing providers but on most comparison sites, you’ll also get a breakdown of the features of the policy so you can see which insurer offers you what you actually want.

Choose a smaller, safer car

If you’re looking for a new car then it’s definitely worth considering how much you’ll have to pay for your insurance. All vehicles are divided into 50 insurance groups with the lower groups seen as being less of a risk, so be sure to see what group your potential purchase falls into before buying.

While you may want a hot, new flashy set of wheels, a smaller, more economical and safer car will reduce the cost of your premium. For more information on what decides your car insurance group and how to reduce the cost of cover if you’re in a high group, check out our helpful guide to understanding insurance groups.

car insurance premiums

Increase your excess

If your car insurance premiums have gone up, you can increase the amount of excess you’re willing to pay and you’ll receive a larger discount from your insurer. Your excess is the amount of money you agree to pay towards any claim you make.

It’s important to remember that most standard insurance policies come with two types of excess, voluntary and compulsory and you’ll have to pay the total amount of both towards the total cost of your claim. If for example you set your voluntary excess to £300 and the compulsory excess was set at £200, you would have to pay £500 before your insurer contributes anything.

You should always make sure that you are able to pay your excess if the time comes before agreeing to the terms of the policy but it can be a great way to reduce the overall cost of insurance.

Temporary car insurance

While all the tips above will save you a bit of money on your car insurance, the best way to save hundreds of pounds on cover is by only paying for cover you actually need.

There are many everyday situations which would require you to borrow a car or need insurance on a temporary basis where having to pay out for annual cover would just be a huge waste of time and money.

If you’re borrowing a car for the day, need instant cover in an emergency or are just picking up a new motor, you won’t want to pay for a years’ worth of insurance when you’ll only need for cover for a day or two.

Fewer and fewer insurers offer the ‘driving other cars’ clause in their policies so if you’re using someone else’s vehicle your existing insurance may not offer proper legal cover and you could face between 6 and 8 penalty points, an unlimited fine and even risk having your car destroyed by the police.

For quick and easy peace of mind, temporary car insurance from Tempcover is the ideal option. From just 1 hour up to 28 days, short term cover can save you hundreds of pounds on car insurance by providing cover as and when you need it.

It’s the smart and simple approach to insurance and with over 2 million policies sold, it’s helped a lot of drivers save time and money.

Find out more about how temporary car insurance could help you and get a quote in minutes online, anytime.

 

Sources

www.confused.com/car-insurance/price-index