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Auto insurance premiums at highest level ever, say insurers

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Car premiums have hit their highest recorded levels ever and rose at much more than five times the cost of inflation during 2016, good Association of British Insurers.

Increases to insurance premium tax, increased repair costs as well as the rising costs of whiplash claims all conspired to send out the standard comprehensive policy to 462 in the last quarter.

The ABI’s motor premium tracker, which measures the cost consumers actually purchase their motor cover, showed that within the fourth quarter of 2016 policies rose by 4.9% or 22 for the average premium.

The ABI said the common premium across the whole of 2016 was now 9.3% on top of it was actually the year before.

The new figures come amid concern that the Ministry of Justice could possibly be gonna pile more pressure on motor premiums using a cut in the discount rate C a mechanism employed by the courts to alter large compensation payments.

Crackdown on whiplash claims could knock 40 off motor insurance bills

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Rob Cummings, assistant director and head of motor and liability at the ABI, said: “These continue being a down economy for honest motorists. They may be bearing the brunt of a cocktail of rising costs associated with increasing whiplash-style claims, rising repair bills as well as a higher rate of insurance premium tax.

“While we offer the government’s further reforms to tackle lower-value whiplash costs, it’s got to not give with one hand and take off while using other. The sudden decision to check the discount rate can turn a drama right into a crisis, which has a significant cut throwing fuel within the fire regarding premiums.”

The ABI said since budget in July 2015 there was three separate increases to insurance premium tax, which resulted in the tax could have doubled from 6% to 12% when the latest rise came into impact on 1 June this current year.

Meanwhile, the regular repair bill after having a crash rose by nearly 32% during the past few years to 1,678. This became due to increasingly complex vehicle technology plus the rising price of spares due to currency fluctuations.

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