British insurers have called on the government to help cut the cost of insurance policies after it has emerged that car insurance premiums reached a record high last year.
According to the Association of British Insurers (ABI), the average fully comprehensive policy cost £481 in 2017 – a rise of nine percent on the 2016 average and a whopping 29 percent increase on 2014’s figures, leading many to criticise the increases.
The annual figures don't tell the whole story, however, with the average for the final quarter of the year even higher. At £493, it was the highest quarterly figure on record and a six percent increase on the same period in 2016.
The ABI said ‘urgent reform’ was needed to slow the dramatic rise in premiums.
The organisation has asked the government to freeze Insurance Premium Tax, which currently stands at 12 percent, and change the way in which compensation is calculated.
In a statement, the ABI said particular attention should be paid to the way in which ‘lower-value whiplash-style’ claims are handled and that reforms should be introduced as quickly as possible to ‘ensure a fairer system for claimants and insurance customers’.
Rob Cummings, the ABI’s assistant director and head of motor and liability, said: ‘The rising cost of motor insurance shows no sign of abating. Changes to how compensation pay-outs are calculated, Insurance Premium Tax, more whiplash-style claims and rising repair bills are all piling on the pressure for cash-strapped drivers.
‘The government must urgently bring forward relief for motorists by introducing its reforms to create a fairer compensation system, and tackling low-value whiplash style claims without delay, as well as freezing Insurance Premium Tax. It is time cash-strapped motorists got a break.’