In the last year, drivers have saw their car insurance premiums have gone up on average by £110 according to a comparison site.
Due to more expensive repairs and the recent government changes to injury payouts, annual insurance has increased by 16%. In the year to March 2017, drivers paid on average £781 on comparison sites for a comprehensive policy.
Average premiums are set to rise to a record high and could pass £1000 next year. Newer vehicles are the ones that have seen the biggest increase due to the complex electronics which make repairs more expensive.
“A prang on a bumper is now not only a piece of plastic to be replaced, but a cacophony of sensors and cameras,” a Confused.com spokeswoman said.
Prices have also risen in response to a new formula for calculating compensation payments, according to the comparison site’s research. In March, premiums rose by 4%. The government altered the so-called Ogden Rate for calculating lump sum payments to accident victims who suffer long-term injuries.
Car insurers will increase to offset the higher payouts. The pressure from the new formula and the impending rise in Insurance Premium Tax could result in premiums increasing throughout the year.
“As the industry adapts to additional pressures… we could be on course to drive past the £858 peak we saw in 2011,” said Amanda Stretton, motoring editor at Confused.com.
“As car insurance costs continue to climb, average premiums could even break the £1,000 barrier by next year,” she added.
According to research, the highest rise in percentage terms came in Scotland where car insurance prices increased 21% in the Scottish Highlands. However, London drivers still pay the most in premiums though with prices rising 16% to an average of £1514 in East London.
Men also tended to pay around £96 more for insurance policies compared to women across the UK it found. When comparing age groups, premiums rose 11% for 17 year olds, 23% for 66 year olds but it dropped 3% for those aged over 71.
Younger drivers tend to make larger and more frequent claims and are set to face the brunt of rising insurance costs in the coming months.
“We would expect premiums for younger drivers to increase at a drastic rate over the next quarter and probably flatten out,” a Confused.com spokeswoman said.
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Read the full article here on BBC News.