Car insurance premiums up eight per cent year-on-year

Car insurance premiums rose by eight per cent in May, compared to May 2014, according to analysis of 1.9 million quotes by MoneySuperMarket.

Analysis of year-on-year pricing reveals the average annual premium is now £443, up from £411 in May 2014. Car insurance premiums had been dropping year-on-year since 2011, falling by over a quarter (26 per cent) between May 2011 and May 2014. However, 2015’s figures buck the trend, showing an eight per cent increase since May 2014 – adding £32 to a typical policy.

Kevin Pratt, insurance expert at MoneySuperMarket, said: “Insurance premiums have been on a welcome downward spiral, but it looks like the end of a happy ride for British motorists.

“One reason for premiums creeping up is the continued high level of compensation claims for whiplash and other injuries sustained in car accidents. The Government is keen to tackle the problem of fraudulent claims and has recently introduced a series of measures in an attempt to curb our compensation culture; however the number – and value of - claims has not fallen as far as the industry expected, and insurers are filling this gap by hiking premiums.

“Driving is an expensive activity, especially when you consider all the costs involved, including petrol, tax and the car itself. As car insurance premiums are on the rise, it’s more important than ever motorists shop around for the best value cover, to ensure they’re getting the most for their money.

“It’s always worth remembering that many drivers lose out when their policy is automatically renewed by their insurer. Existing insurers often charge more than the driver would pay elsewhere, so it always pays to shop around for cover. Using MoneySuperMarket can save motorists up to £224 on their policies.”