Personal injury claims 'pushing up motor insurance costs'

Personal injury claims 'pushing up motor insurance costs'

The cost of motor insurance is being pushed up by a fresh wave of claims for personal injury such as whiplash, according to the Association of British Insurers (ABI).

The average price paid by motorists for an annual comprehensive motor insurance policy increased by 2% in the second quarter of 2015 compared with the previous quarter, according to the ABI's figures.

Its tracker showed an average premium of £367 for the three months of April, May and June. A year ago, the typical cost of cover was £356.

The ABI said that "climbing personal injury claims are pushing premiums higher".

The body said data shows that the number of personal injury claims related to road accidents was 12% higher for the year ending April 2015 compared with the previous 12 months.

Average premiums remain lower than the typical cost of £377 in the second quarter of 2013, when reforms to the civil justice system were introduced by the Government, including a reduction in fixed legal fees for personal injury claims. Since those reforms were introduced, insurers have passed £1.1 billion of savings onto motorists, the ABI said.

Rob Cummings, the ABI's manager for general insurance, said: "Motorists have seen a solid two years of lower insurance premiums as a result of market trends and in the wake of the Government's reforms to tackle frivolous personal injury claims, and over a billion pounds' worth of savings have been passed on to customers.

"With pressure on premiums increasing however, it's important the Government continues its work to tackle the compensation culture and attack the high cost and number of whiplash claims.

"With this in mind, we welcome the Government's announcement of a review of the activities of claims management companies in the last Budget."

The AA recently warned that the days of cheap car insurance premiums are over, and further rises are "inevitable", after an insurance index it runs also found that the cost of car insurance has jumped in recent months.

Last month, insurers said that millions of customers will face higher costs for cover after a hike in taxes charged on insurance products.

Chancellor George Osborne's summer Budget revealed that insurance premium tax will be increased from 6% to 9.5% from November.

Mr Cummings continued: "UK drivers benefit from one of the most competitive motor insurance markets in the world. But with pressure on claims costs and an increase in insurance premium tax adding an additional £12.80 to the cost of the average policy from November, other factors are starting to put up costs.

"This makes action against claims management companies and tackling whiplash claims a key priority."

The cheapest cars to insure
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Personal injury claims 'pushing up motor insurance costs'

Price new: £5,995

Dacia has made a big impact in the UK with its line of affordable motors.
The Sandero is the foundation of the brand's offering and is famed for being the UK's cheapest car.

With a group two insurance classification it's also one of the cheapest cars to insure right now.
The entry level Access model is sparsely equipped, but it has a practical interior, big boot and low running costs.

Price new: £8,060

The Seat Mii is a small city car which Auto Express praises for its spacious interior, good build quality and supple ride.

All models are in insurance group one, bar the group two Sport version.
The Mii is available in three-door or five-door styles, but both measure just 3.5 metres, making it perfect for getting around town.

Price new: £8,090

The Skoda Citigo was crowned Auto Express Best City Car 2013.

The magazine praised its low running costs and practicality as well as its grown up driving experience.
Like its Mii stable mate the Citigo has group one insurance in all apart from its top specification model, making it one of the cheapest cars to insure.

Price new: £8,265

The third of the Volkswagen's group of three city cars to make the list is the Up!

Auto Express says the Up! was 'born to rule' city streets with its small dimensions and lightweight body.
There's three versions of this fun city car; Take Up! has a group one rating as does Move Up! while the higher spec High Up! gets a group two classification.

Price new: £8,345

The Hyundai i10 is another car which can get you a cheap insurance quote thanks to a group one insurance rating across all the 1.0-litre petrol models.

Auto Express says the new 2014 i10 offers big car features in a small package. And for £8,345 you also get Hyundai's five-year warranty and roadside assistance package.

Price new: £8,995

Vauxhall has managed to squeeze one of its full sized Corsas into insurance group two.
Auto Express says the 1.0-litre ecoFlex model has the lowest insurance costs of any mainstream supermini.

The eye-catching design, solid interior and big-car features make it an appealing buy for drivers.

Price new: £9,575

The Smart car caused a bit of a stir when it first appeared thanks to its dinky dimensions and bold two-seat layout, making it very useful for driving about town and absurdly easy to park.

The Smart ForTwo is the latest incarnation, which keeps to the same formula; it still has only two seats and is one of the smallest cars on the road measuring just 2.5 metres long,
The entry level 0.8- and 1.0-litre models qualify for group two insurance.

Price new: £11,810

The Peugeot Partner Tepee 1.6 VTi is the passenger version of the Partner van and according to Auto Express easily the most spacious new car that currently qualifies for a group two insurance rating.

It's got a boxy shape that provides plenty of room and has sliding doors which make it a very practical and flexible family car.

If you're after something smaller the Peugeot Bipper Tepee, which is the smallest of Peugeot's family of Tepee MPVs, also gets a group two insurance rating.


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