Traffic on Good Friday
(Picture: PA Wire)Drivers already hit by the soaring cost of fuel are facing a double whammy of expenses as car insurance rises for the first time in 18 months.
A survey of 2,000 motorists conducted by Confused.com and insurance company Willis Towers Watson found that insuring a vehicle is now £12 more expensive than it was a year ago.
Two in five (42%) of those who received their renewal in the past quarter saw their price increase year-on-year, rising by £39 on average.
It’s a similar picture for home insurance customers, with just over 2 in 5 (41%) of those who received their renewal in the past quarter encountered a price increase. Policies rose by £3 on average.
“Car insurance costs are starting to increase, and this is mostly down to the fact that we’re driving a lot more now than we were 12 months ago, and this means the number of claims insurers are paying out on is likely to have increased too,” said Confused’s chief executive Louise O’Shea.
The most expensive regions to get car insurance were inner London (£864), Manchester (£697), Outer London (£687), West Midlands (£657) and Leeds (£627). The Scottish Borders is the cheapest region for car insurance, with an average cost of £370.
Changes to car insurance were introduced by the Financial Conduct Authority (FCA) in January that have stopped insurers pricing new and renewing customers differently.
Under the new regulations, insurers must offer drivers the same price they would receive as a new customer buying in the same way, banning what was previously known as a new customer discount.
Following these changes, one in five (19%) drivers who received their renewal in the past three months wrongly believed that their renewal wouldn’t increase. A further 1 in 5 (21%) are expecting their renewal price to be cheaper, according to the survey.
