Car insurance premiums go up by over 12% in the final quarter of 2015

Motorists are having to pay 12% more for their car insurance compared to this time last year.

The latest Insurance Price Index from the British Insurance Brokers’ Association (BIBA) and Acturis, shows that annual premiums for car insurance rose by 8.6% in the final quarter of 2015 when set alongside premiums paid in the same period of 2014. With the 58% increase in Insurance Premium Tax (IPT) that came into effect on 1 November 2015, the actual cost of motor policies have gone up by over 12%.

Steve White, CEO at BIBA said that his organisation had warned that IPT is a tax on protection and that it would affect the affordability of insurance.

“The motor insurance industry has worked hard to tackle fraud to help minimise rises in premiums so it is particularly worrying to see such a significant increase fuelled further by the IPT rise, especially in a period when we are seeing the number of uninsured drivers rising.”

“BIBA’s 2016 Manifesto calls for ‘fairness for all’ including fairer premiums for customers, who all find themselves paying for fraud and uninsured driving, and we are committing to working with other industry stakeholders to reduce both.”

The Insurance Price Index also examines premium developments of three typical ‘insurance baskets’ for ‘Larger Commercial’, ‘SME’ and ‘Individual’ tracking percentage changes in premium for these groups of buyers.

Theo Duchen, Co-CEO of the Acturis Group added: “The individual insurance basket which tracks private car and personal household premiums has shown decreases in annual average premiums since the end of 2012, but the latest figures confirm that they are now levelling off and indeed comparatively grew in quarter 4 2015 compared to the same quarter last year.”

“BIBA’s 2016 Manifesto calls for ‘fairness for all’ including fairer premiums for customers, who all find themselves paying for fraud and uninsured driving, and we are committing to working with other industry stakeholders to reduce both.”

Mark Dugdale