A Huge Rise in Car Insurance Fees
The Cost of Insuring Cars Has Risen by 40 Per Cent
For those struggling in the day to day running of their cars, news that car insurance rises of 40 per cent have taken place over the last year will be of little comfort. But this is the news that has emerged today thanks to research carried out by AA Insurance, with indications of fraud and personal injury claims adding to the burdens of motorists across the country.
According to the AA study the average price for insuring a car was £892 at the end of March and this was after a rise of around 40% on the previous year. When this is added to rising fuel prices it paints a bleak picture for British motorists in the years ahead – but is this trend set to continue?
After all, the news comes in the same month that the coalition government announced the banning of ‘no win no fee’ services offered by some companies, which have led to a ‘compensation culture’ in the UK. Justice Secretary Ken Clarke has said that be curbing such practices, car insurance premiums could go down across the country. This means that whilst prices have risen over the last year, it might not be a clear sign of things to come.
The Association of British Insurers agreed with the Justice Secretary in their press release earlier this month: “For too long ambulance-chasing lawyers and claims management firms have encouraged many people to believe that there is a compensation culture to exploit,” said Nick Starling, of the ABI. “The result has been a slower process for genuine claimants, and out of control legal costs that end up being paid for by all consumers through higher insurance premiums.”
The figures demonstrated by the AA show that the rise in the last year has been the biggest since they began carrying out their research in the first half of the 1990s. With high levels of personal injury claims being made – something that has been blamed on the ‘no win no fee’ culture and has seen 200 personal injury claims made every day according the study – it is clear to see why.
So it remains to be seen how the picture will be different this time next year.
