Car Insurance Premiums Accelerating Well Ahead of Inflation
June 27, 2017
The average premium paid by car insurance policy holders increased by an average of 16.6 per cent in Scotland last year, according to a new set of figures.
Research by Consumer Intelligence suggests that the average car driver in Scotland paid £474 during the year to May 2017, which represents a notable rise from the comparable figure for the year before.
Rises in the costs of car insurance premiums are understood to be adding to the financial pressures faced by consumers across Scotland and throughout the UK.
On a UK-wise basis, car insurance premiums increased by some 15.7 per cent in the year to May, which is more than five times the current headline rate of inflation.
Much of the blame for the steeply rising insurance premiums is attributed to changes in regulations relating to personal injury insurance and the ‘Odgen rate’ method which determines the legal basis for deciding the scale of insurance monies paid out to victims of road traffic accidents.
The relevant rule changes came into effect from March 2017 and Consumer Intelligence has said that almost half of the overall annual insurance premium increase was recorded in the three months prior to the end of May.
Car insurance bills are reckoned to be rising most sharply among people aged over 50 but motorists aged between 21 and 24 still pay considerably more than their older counterparts to cover their insurance premiums.
These bills are rising more sharply in Scotland than in the UK as a whole but Scots still pay relatively low premiums as compared with the rest of Britain and particularly when compared to London, where premiums are typically a good deal higher than the national average.
“Price rises had been levelling off at the end of last year but are now rising rapidly as the full impact of the discount rate cut comes into effect,” said John Blevins, a pricing expert from Consumer Intelligence.
“Government plans to review the Ogden rate have so far taken a backseat following the Election although there is some relief from plans to push ahead with whiplash reforms announced in the Queen’s Speech.
“However, with the impact of the latest insurance premium tax rise still to come into effect drivers need to shop around to limit increases in premiums.”
If you live anywhere in Scotland and you’re struggling with personal finance or debt related problems then Scotland Debt Solutions can help. Call us today to arrange a free consultation.
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