- 10% year on year rise in the cost of the average comprehensive policy
- Insurance Premium Tax (IPT) and compensation culture drive up premiums at a time when they traditionally fall
The average price paid for private comprehensive motor insurance in the first quarter of 2016 rose by 10% on the same period last year according to the ABI’s latest Quarterly Average Private Comprehensive Motor Insurance Premium Tracker published today.
The Tracker shows that the average premium paid in the first quarter was £429, up 10% on the first quarter of 2015, making the average premium £41 more expensive than it was this time last year.
This is the biggest first quarter on first quarter rise since ABI started collecting this data back in 2012.
The average premium also rose by £2 compared to Q4 2015, the first time premiums have risen from Q4 – Q1 since ABI started publishing our Quarterly Tracker reflecting renewed cost pressures on unprecedented pressure on premiums, such as higher Government imposed taxes.
James Dalton, ABI’s Director of General Insurance Policy, said:
"The last 12 months has been a bumpy ride for motorists. After a period of falling premiums as insurers delivered on their promise to pass on cost savings arising from the previous Government’s civil justice reforms, motorists are paying the price for the Chancellor’s decision to increase Insurance Premium Tax last year as well as the persistent rise in the number of whiplash claims the industry faces.
"While motorists can shop around to get the best deal, a further increase in IPT is already scheduled by the Government for October putting further upward pressure on premiums. The average premium will only fall once the Government’s further planned reforms to remove the right to claim damages for whiplash are delivered. So, like insurers, honest motorists will be looking forward to seeing those reforms implemented sooner rather than later."
For more information, including interactive chart see our industry data update.