Car insurance premiums increase by up to 50 percent

It has been revealed that drivers are facing huge financial burdens, with the news that in some cases car insurance premiums have soared by up to a massive 50 percent in the space of one year. This could see some motorists now paying hundreds of pound a year extra in car insurance premiums at a time when many are already struggling to keep their vehicles on the roads due to high petrol prices and other financial commitments.

Annual renewal costs on car insurance are now said to be at an all time high, and according to some industry experts part of the blame for the soaring cost in cover lies with ‘crash for cash’ fraudsters, who are swindling insurance firms out of huge sums of cash by staging crashes and then claiming. Fronting, which is where parents are including their kids on their own cover due to the cost of insurance for a younger driver, has also been blamed for the surge in car insurance costs.

The cost of cover for male drivers aged between seventeen and twenty two years of age has soared by around 51 percent, taking the average price of cover to £2500. For female drivers of the same age the average cost of cover is around £1400 according to figures released by the motoring group, the AA.

The AA commented on the fact that many parents were engaging in fronting, stating: ‘This is actually fraud and it is driving up premiums for everyone. Insurance companies are getting much better at detecting this.’

The company added: ‘There has also been an escalation in our compensation culture, imported from America. In the past, if you had a knock or a bump and were left with a sore neck, you would take a paracetamol. Now personal injury lawyers encourage you to sue. Personal injury claim rates in Britain are four times those of any other European country – yet we have fewer accidents.”

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Cut back on your vehicle insurance costs

It was recently reported that the cost of car insurance in the UK has soared recently, with industry groups claiming that there has been a 14 percent rise in vehicle insurance related cost in the second quarter of this year. These increases are something that most drivers can ill afford, particularly considering the financial strains that most people are under due to the difficult financial climate, the after-effects of the recession, and the high price of essentials such as petrol and food.

Of course, having insurance cover in place is a legal requirement for drivers, and no driver should be on the road without having some form of cover in place. However, it is important to remember that there are different levels of insurance cover to choose from, and you may find that the vehicle that you have does not require the more comprehensive and costly cover.

If you have an older car that is not worth much in terms of monetary value there is little point opting for the fully comprehensive cover, as this will work out more expensive and you will get very little back for your car in the event that it is written off in an accident because of its low value. On the other hand if you have a newer, higher value vehicle it is best to opt for comprehensive cover as otherwise you would be shelling out a fortune in the event that you had an accident that was your fault.

It is also important to remember that the excess levels that you choose will affect the cost of your cover. This is the amount that you have to pay from your own pocket in the event of a claim, and insurance firms tend to offer a number of choices. If you go for the lower excess then you will not pay as much yourself in the event of a claim, but with the higher excess you can take a risk and cut the cost of the cover.

Comparing deals is vital in order to reduce the cost of your vehicle insurance, and this is something that can be quickly and easily done these days using the various comparison websites available online. You will be surprised at how much you can save simply by comparing deals. In some cases you can even reduce your insurance costs by phoning your insurance company and stating that you are considering going elsewhere. The competition amongst insurers is stiff, and many will negotiate a discount in order to keep your custom.

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Save money by cutting insurance costs

As most of us know the recession is underway, and with finances already very tight for most this has resulted in the financial situations of many households going from bad to worse. Read more

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Greener cars mean lower tax and insurance, says expert

Drivers of greener vehicles can take advantage of lower tax and insurance costs, which may be especially beneficial under the current credit crisis, the British Insurance Brokers’ Association (BIBA) has said.

Since road tax is based on emissions, owners of green cars will save money compared to other car owners, particularly those who have four-wheel drives.

Insurance is based on risk-based pricing, which is made up of several factors, including a person’s age, experience, the type of car, and the value of the car.

According to Articlesbase, the recent budget introduced an increase in car tax and a 2p rise in fuel costs to come in effect from October 2008, although critics are unsure whether the tax cuts for greener cars will encourage drivers to consider cleaner transport.

However, Graeme Trudgill, technical and corporate affairs executive for BIBA, says: “People recognise that the large four-wheel drive vehicles aren’t so popular and therefore people are now thinking more about buying more environmentally friendly cars like the Toyota Prius.”

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