21
MAR
2017

£1200 insurance cap to be debated by MP’s

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Today, MP’s will debate whether or not car insurance costs for young people should be capped at £1200 a year. This follows after a there was an online petition that was signed by over 185,000 people.

E-petitions that attract more than 100,000 signatures need to be considered for a debate in parliament.

This comes on the day that car insurance premiums are expected to increase which is a result of the government decision to change the injury compensation rules. These changes mean that insurers will have to pay out to more accident victims and this will cause an expected increase in premiums.

Rhys Parker who is 19 years old started the e-petition after his own struggle with affordable car insurance.

The teenager said he was quoted £2,500 for his first year of driving, but eventually managed to get it for £1,400.”That’s very much basic insurance, I think it’s ridiculous. Young people just don’t get the help they need.”

MPs were recently told that the average premium for a 17 to 20-year-old driver is £3,878 a year. E-petition debates are for discussion only so MP’s will not have the power to introduce a limit on premiums.

The debate will be opened by Steve Double, the Conservative MP for St Austell and Newquay.

“I don’t support the cap, but I do think we should be doing more to help young people,” he said. “The reason premiums are high is that young people have far more accidents.”

The government has responded to the petition by by saying that the reforms to whiplash rules would result in lower premiums. The advice it did give was for consumers to shop around to see if they could find a better deal. Other options include having a black box installed under the bonnet so insurance companies can gain data about how good of a driver the person is. This can lead to a reduced cost in insurance.

The accountancy firm PwC has estimated that the average cost of car insurance could rise somewhere between £50 and £75 a year as a direct result of the changes to injury compensation rules and young people may have to pay up to £1000 extra.

The public was warned by the Association of British Insurers (ABI) that the premiums would begin to rise from Monday with two further increases expected in July 2017 and January 2018.

If you are looking for Motor Fleet Insurance then why not give Todd and Cue Insurance a call on 0191 482 0050 or email info@toddcue.com.

 

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