Car cover costs up 10%: how to fight back

Swerve insurance price hikes by getting a better deal...

man helping a woman after a car accident

The average cost of annual comprehensive motor insurance is 10% higher than it was this time last year, according to new figures from the Association of British Insurers (ABI).

A typical motorist in the UK must therefore pay £434 a year to insure his or her car. That's about £40 more than the average driver was shelling out for cover in summer 2015.

Why are prices going up?

The ABI's research indicates that the price hike is being driven by increases in Insurance Premium Tax and the rising costs of personal injury claims.

Rob Cummings at the ABI said: "These continue to be tough times for motorists. Despite a highly competitive market, cost pressures on premiums caused by the Government's increases in Insurance Premium Tax and an increasing overall cost in lower value personal injury claims are feeding their way through into higher motor insurance premiums."

It is calling on the government to crack down on the false and exaggerated claims that cause insurers to increase premiums for everyone.

"It is imperative that the Government pushes ahead with proposed reforms to tackle the compensation culture by limiting compensation for low value whiplash claims, so that savings can be passed onto consumers through lower premiums," Cummings said.

In the meantime, though, drivers can expect to pay 10% more when their insurance comes up for renewal.

How can I cut the cost of car insurance?

There are lots of steps you can take to reduce the amount you pay for car insurance.

For example, you should always shop around for the best deal rather than simply renewing your policy with your existing insurer. Just be sure to check that cheaper policies offer the level of cover you need.

Other ways to cut costs include on naming drivers who regularly use the vehicle on the policy, keeping your car in a garage or off the street overnight and fitting an approved alarm, immobiliser or tracking device, which can attract a discount of around 5%.

If you think you are a good driver, you should also consider a telematics - or black box - policy, with which your speed, handling and driving style are monitored and good behaviour is rewarded with lower premiums.

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