Car Insurance Rates Skyrocket in the UK

Drivers in the United Kingdom will soon be in for a shock when it comes time to pay for auto insurance. The House of Commons transport committee recently released a report blaming the rise in rates on an increase in claims. Claims for whiplash injury have risen 18 percent since 2010, and the average payout has risen by nine percent. The hardest hit areas in the UK are Liverpool, Manchester, Sunderland, Wigland and Oldham. Here are five things that UK drivers should know:

1.Age Matters

While insurance rates have gone up for every driver in the UK, young drivers have been the hardest hit. Drivers aged 17 to 22 have seen a rise in premium just over six percent in just three months time. The average premium for these young drivers was £2,497; hardly cost-effective for a new, 17-year-old driver. People over the age of 60 saw a rise in their premiums of five percent. Because young drivers are considered such a risk, many companies are stopping coverage for drivers under the age of 21 altogether.

2.Different Coverage Means a Different Price

Along with higher premiums for younger drivers comes higher premiums for certain types of coverage. While the average price for comprehensive coverage is just under £900, the average price for third party, fire and theft is over £1,400. Insurance companies explain that this difference in the cost of coverage lies in the people who purchase the coverage. Younger drivers are more apt to purchase third party, fire and theft coverage, and younger drivers are in a higher risk category.

3.Gender Bias

Women in the UK tend to pay less for car insurance than their male counterparts. Beginning in December of this year, insurance companies will no longer be permitted to take gender into consideration when setting a premium price. This means that women will typically see the biggest increases in their premiums when it comes time for renewal. Not only will women be playing catch-up to men, but they will experience the rate hikes at the same time.

4.Where You Live Matters

It’s normal for insurance companies around the world to base your premium, in part, on where you live. People who live in areas with the greatest numbers of insurance claims will pay the steepest prices. In the UK, drivers who live in the northwest will pay significantly higher insurance premiums than those who live in Scotland. In England, drivers in Cambridge are among those who will pay the lowest premiums.

5.Start Shopping Now

Drivers in the UK are advised to start shopping around for insurance now. Though price hikes will be happening across the board, one insurance company may offer lower premiums than another. If a renewal of a driver’s current policy will include a six percent hike, finding a company who will only raise the driver’s rates by four percent will be beneficial in the long run.

Drivers in the UK need to brace themselves for the coming rate hikes. Almost every driver in the country will experience a rate increase when it comes time for renewal. By preparing themselves now and shopping around for a better price, UK drivers will be better able to handle the inevitable rise in premiums.

Leslie Brentwood lives and writes in London. She writes for www.carinsurance.org.uk where you can find more information on car insurance, trips, and tips for saving money when you drive.