UK reports greatest increase in premiums it has seen since 2011
Auto insurance premiums in the United Kingdom saw the greatest increase in 2015 that have been reported in the country since 2011. Throughout 2015, rates have been growing steadily, with some drivers expressing concern regarding the increased financial pressure. According to Confused.com’s auto insurance price index, rates in the UK rose by an average of 13.2% overall. In the fourth quarter of last year, rates grew by an average of 6.9%.
Insurance Premium Tax and other factors are affecting the cost of auto insurance coverage
According to Willis Towers Watson, a multinational risk management and insurance brokerage, there are numerous factors affecting the cost of auto insurance coverage. One of these factors is the increase of the UK’s Insurance Premium Tax. The tax has grown recently due to concerns that the insurance industry is generally under taxed. Another factor affecting insurance premiums is the growing cost of claims, especially when repairs to vehicles are being considered. Higher claims payouts have led to financial losses for insurers, whom have attempted to offset these losses by raising auto insurance premiums.
Rates are expected to continue growing in the UK
Over the past 11 months, drivers have not seen a single decrease in premiums. Confused.com believes that this trend is likely to continue. Drivers are now paying approximately $970 for their auto insurance policies, on average. In 2011, drivers saw a significant increase in premiums, with rates reaching an average of $1,233. Since 2011, premiums have fallen, but insurers are now beginning to face greater risks and have also been fighting fraud, which is becoming more prevalent throughout the United Kingdom. This has lead to rate hikes.
Fighting fraud could help mitigate the cost of insurance coverage
Consumers are eager to see insurance premiums fall, but this may not happen in the coming year. Government officials have been looking for ways to mitigate the cost of auto insurance in recent months, however. Fighting fraud may be the best option, as fraud has become a costly burden on both insurers and their customers.