2010 the worst year for car insurance price rises
Third party, fire & theft insurance has gone up by 56.3% in 2010 (an extra £322) compared to a rise of 21.6% in 2009, according to Confused.com.
Prices rose by 38.2% during 2010, taking the average premium paid across all age groups to £695. The percentage increase was more than triple that of 2009. Third party, fire and theft (TPFT) customers fared even worse, facing an annual increase of 56.3%, the equivalent of an extra £322, meaning the last refuge for young drivers looking to cut costs seems to have been compromised.
Despite it being the subject of a Parliamentary Transport Select Committee, the last two quarters have not been the hardest on the 17 - 20 year old age group. In fact it's 51- 55 year olds who have been hit with the biggest rise in quarter four and during the year.
The rises in the older age bracket will hit this group hard who have already been affected by wider budgetary changes. Parents adding children to their policies as named drivers account for the bulk of the increase that this group has seen. The immediate issue seems to be insurance providers getting increasingly wise to the issue of fronting. Men adding a child to their policy saw rises 11% above the average.
Regionally Manchester/Merseyside saw the fastest rising prices over the past year. An 11% increase during quarter four brought the annual increase to 49%, 10% above the UK average.
Will Thomas, head of motoring at Confused.com says "Whilst costs are undeniably still rising, there is evidence that the rises are starting to lose momentum. Despite the hefty annual increases, price rises declined for the second quarter running. Comprehensive policies rose by an average of 6.9% between October and December with TPFT ones increasing by 9.2%.
"The investigation into insurance costs for young drivers is a clear sign that escalating costs and their implications are being taken seriously, but it seems there is no light at the end of the tunnel just yet. The rise in Insurance Premium Tax and rising fuel costs will continue to challenge people financially.
The only way for households to tackle spiralling costs is to make sure they are getting the best value, best fit policy. The easiest way to do this is to shop around."
"Insurers have been carefully managing a juggling act between the need to address underlying profitability and maintaining competitive prices which explains the trends we have seen particularly in the second half of the year," noted EMB partner, Peter Lee.