The Rising Cost of Motor Insurance

Friday, February 8th, 2019 - Uncategorized

If you've recently renewed your car insurance, and let's face it, you must have done within the last 12 months at least, then you will have noticed that your premium has gone up either you are insuring for personal use or taking out business car insurance and even with an extra year's no-claims bonus. Despite this, insurers are claiming that they're still losing money. This is down to an increase number of fraudulent claims and the personal injury claim culture. According to one study, almost half the money you give to the insurance company goes on whiplash claims, fraud, legal fees and taxes. Whichever way you cut it, it is honest drivers who are footing the bill. Below are some of the main reasons:

Uninsured drivers

Recent statistics show that approximately one in 20 UK motorists is uninsured. Not only do these drivers cost honest drivers about £ 30 a year on their premium, but they are also far more likely to be involved in accidents, fraudulent claims and other criminal activities. The maximum fine for this offense is £ 1000, in theory. In practice, the fine is around £ 200, which is significantly lower than the average cost of insurance – you are likely to be fined more for not having a TV license.

Personal Injury Lawyers

We've all seen the aggressive TV adverts offering no-win, no-fee services for any kind of accidents. These companies often represent those who have been involved in car crashes. In fact, it is estimated that these kind of claims have doubled in the last year – and the companies even run loyalty schemes to claimants who recommend their services to other family members. These claims now account for 10% of the premium a motorist pays to stay legal on the road.

"Whiplash" claims

Whiplash has become a favorite pseudo-injury among those committing insurance fraud. Because it is so difficult to find real physical evidence beyond the sufferer's pain, these claims have rocketed and now account for an eye-watering 20% ​​of the insurance premium. What's more, it costs the NHS £ 18 per patient in consultation fees, coming to £ 8 million a year. All this is in contrast to official government statistics which shows that slight injuries in road accidents have actually fallen in recent years.


Another way of claiming money off an insurance policy is to stage a car accident in order to claim compensation for the injuries incurred. This costs £ 44 on the average policy. These accidents begin in inner-city areas but have now spread all over the country – this is because premiums were increasing in areas where these "accidents" were common, so now the cars are insured in low-risk postcodes instead. It is surprisingly broad, with an estimated 1 in 20 of drivers under 35 having taken part in such an incident.

Young Drivers

If you think that you have it bad with your years of no-claim bonuses, then spare a thought for those just starting out. The AA have said that the average premium for a new driver has jumped 51%. Young drivers who want business car insurance find it hard to find reasonably priced cover. The insurance companies admit that these increases are tough on young drivers, but the stats show that they cause proportionally more accidents than any other group. The answer would seem to be that the UK introduces some sort of graduated system, similar to one in place in Canada, which would stop young drivers driving at high risk times and therefore keeping their premiums down.

Meanwhile competitive business car insurance quotes can be obtained at Specialist Risks

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