It’s no secret that motor insurance costs are on the rise and have been for many years. For a long time this added cost was always attributed to fraudsters and compensation-seekers driving up the cost through unethical claims, however, a recent survey has suggested the buck may lie at the feet of repair centres.
The report concluded that the UK motor insurance market coughs up a staggering £28.6 million per day. The Association of British Insurers (ABI) found that the cost of undertaking repair work had rocketed 25% in just three years and was a substantial influence on the rising cost of insurance premiums.
The remarkable annual figure of £10.4 billion actually is announced at a time when the number of accidents and thefts have actually fallen. Accidents have fallen 5% on figures from last year whilst thefts are down 11% on the last five years.
One of the reasons for the increase in repair costs may be due to the technology boom seen in the motoring industry in recent years. Increased technology, extra gadgets and more electric software means that there is more scope for things to go wrong, and when they do go wrong, it costs more. The ABI said that the average fully comprehensive insurance policy costs a UK driver £434, that’s a 9% increase on 2015.
With the government announcing an increase in insurance premium tax from ten to twelve per cent, this will very much be unwelcome news to motorists up and down the country, as premiums look set to soar even higher next year.
The government have recently lodged a campaign to tackle the increasing problem of motor insurance fraud through corrupt whiplash or injury claims, and the campaign has been having a remarkable effect. The initiative should see insurers save millions in pay outs which will translate at around £40 per customer, all of which will be passed down to the policyholder which will certainly soften the blow of the increase in tax.
Let’s hope the rise in repair costs grinds to a halt, and the government’s anti-fraud campaign continues to shave pounds off our insurance costs over the coming years!