Figures reveal that annual renewal costs are at an all-time high. Industry experts blame the rise on an increase in fraud by ‘crash-for-cash’ opportunists and parents putting teenage children on their policies.
Costs for young male drivers aged 17 to 22 have risen by an even higher 51 per cent to an average of £2,500, while young female drivers will pay on average £1,400, according to research by the AA. But putting a 19-year-old son on to an insurance policy for a three-year-old Ford Fiesta could cost a mother an extra £1,000 a year.
Insurance industry bosses will be grilled by MPs on the Commons transport committee tomorrow over why premiums have rocketed in the past year. The annual increase was the largest since the AA Index started in 1994.
Ian Crowder, of the AA, said that some parents were even guilty of ‘fronting’ – putting their children on to their policies as occasional drivers, when in fact the child may be the main driver.
He said: ‘This is actually fraud and it is driving up premiums for everyone. Insurance companies are getting much better at detecting this.’
Mr Crowder added: ‘There has also been an escalation in our compensation culture, imported from America. In the past, if you had a knock or a bump and were left with a sore neck, you would take a paracetamol. Now personal injury lawyers encourage you to sue.
‘Personal injury claim rates in Britain are four times those of any other European country – yet we have fewer accidents. Either we have excessively weak necks or people are responding to the personal injury claim lawyers.’
Insurance companies have been paying out £123 in claims for every £100 taken in premiums over the last ten years, a situation which Mr Crowder said was ‘unsustainable’.
A survey earlier this year showed that parents aged 41 to 55 bore the heaviest increases in the costs of comprehensive cover.
Those aged 46 to 50 had seen massive rises in premiums – more than 60 per cent on average, according to research from Confused.com and EMB consultants. Motorists were furious about the revelation that costs had soared even higher this year when family budgets are already squeezed.
Hugh Bladon, of the Association of British Drivers, said: ‘This is a double whammy which comes on top of petrol prices, which will go up even further when VAT goes up. British drivers will not buy the weasel words of the insurance industry. The rise in fraud and compensation claims alone cannot justify these rises.’
Websites comparing insurance premium costs have also inadvertently led to a rise in fraud, it was claimed, because users can see how their premiums can be reduced by manipulating their answers in online assessments.
Source : Mail Online
