The Truth Behind the Rise and Rise Of Car Insurance Premiums

With the average car insurance quote now hitting a record £971 as of 2012, people have started wondering whether or not premiums are even likely to take a downturn. The figure of £971 comes as a more than double of the sum in 2005, a light £446. With skyrocketing petrol and diesel costs and sky-high cost of living, citizens are now under enormous pressure to keep their households afloat.

Research has unearthed some of the reasons why UK’s £9.4 billion car insurance market is hiking it’s premiums. First off, if research is to be believed, the primary reason behind soaring premiums is fraud and greed.

Most policy holders, who have been involved in accidents where they have been hit from behind, are claiming personal injury as a result of having hurt their neck when the collision occurred. This dodgy practice, known as whiplash, has increased to account for more than half a million claims that take place every year. Despite the falling number of accidents, insurance experts have claimed that this practice has added £90 to the average policy rate.

Also, car insurance comparison websites and companies have found that every year, almost £2 billion is paid off as compensation to such claimants, more than a quarter of whom have been proven to be fraudulent.

However, insurance companies have little choice, since cases such as these are very hard to disprove and it becomes quite a task to discern the difference between a genuine claim and a fake one. This causes a reduced settlement out of court, nevertheless which still sets back the insurance company by a lot. So, in order to compensate for the losses sustained, the insurance companies hike their premiums. That is when people who compare car insurance online cry out in frustration since they are not able to find cheaper car insurance quotes. And the cycle continues.