General Insurance Article - Car insurance continues upward spiral with new Ogden rate

 “The cut in the discount rate applied to personal injury pay-outs has sent shockwaves through the insurance industry. Following the announcement, insurers were quick to say that the fall-out would be felt swiftly and heavily by car insurance customers. An annual premium increase of around £70 per policy has been mooted, with hikes of up to £1,000 a year suggested for young, high-risk drivers.

 “With the changes coming into effect on Monday, British motorists need to be sure their insurance is being fairly and accurately priced. At the same time, insurers must demonstrate they are balancing the needs of customers with the requirement to pay full and adequate compensation to those injured in accidents.

 “In theory, car insurance prices should be going down as the number deaths and injuries resulting from traffic accidents, and therefore the number and size of insurer pay-outs, is declining. Additionally, the government is pushing through reforms to change the way whiplash claims are handled by the courts with the intention of reducing fraudulent claims, which add around £50 to the cost of every policy.

 “Despite these powerful influences, we’ve seen prices increase steeply in the past year and, if insurers are to be taken at their word, this will continue through the rest of 2017 and beyond. Hard-pressed motorists will want to know why premiums only seem to be heading in one direction. With another insurance premium tax increase around the corner in June, insurance companies owe their customers an explanation as to why renewal premiums continue to rocket.”