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Car insurance premiums rise for eight successive quarters | |
(about 9 hours later) | |
Car insurance premiums have once again risen to a new high, according to the Association of British Insurers (ABI). | Car insurance premiums have once again risen to a new high, according to the Association of British Insurers (ABI). |
Between October and December 2017 average premiums rose to £481, a rise of 9% on the previous year. | Between October and December 2017 average premiums rose to £481, a rise of 9% on the previous year. |
That is the highest figure since the ABI started records in 2012, and the eighth successive quarter in which premiums have risen. | |
The industry blames a series of increases in Insurance Premium Tax, and changes to the so-called discount rate. | The industry blames a series of increases in Insurance Premium Tax, and changes to the so-called discount rate. |
Since June last year all insurance premiums have been taxed at 12%. | Since June last year all insurance premiums have been taxed at 12%. |
The government has already announced plans to reverse changes to the discount rate, but these have yet to come into force. | The government has already announced plans to reverse changes to the discount rate, but these have yet to come into force. |
The discount - or Ogden - rate is designed to compensate insurers for the cost of long-term injury claims. | The discount - or Ogden - rate is designed to compensate insurers for the cost of long-term injury claims. |
It was reduced by the government last April, costing insurance firms large amounts of money. | It was reduced by the government last April, costing insurance firms large amounts of money. |
However, in September the Ministry of Justice (MoJ) said it would revise the scheme. | However, in September the Ministry of Justice (MoJ) said it would revise the scheme. |
'Piling on the pressure' | 'Piling on the pressure' |
New legislation may eventually ease the pressure on premiums, although some experts believe that the cost of car insurance is unlikely to fall. | New legislation may eventually ease the pressure on premiums, although some experts believe that the cost of car insurance is unlikely to fall. |
The MoJ has also announced a series of reforms to whiplash-related claims, in an attempt to reduce fraud. | The MoJ has also announced a series of reforms to whiplash-related claims, in an attempt to reduce fraud. |
"The rising cost of motor insurance shows no sign of abating," said Rob Cummings, the ABI's assistant director. | "The rising cost of motor insurance shows no sign of abating," said Rob Cummings, the ABI's assistant director. |
"Changes to how compensation payouts are calculated, Insurance Premium Tax, more whiplash-style claims and rising repair bills are all piling on the pressure for cash-strapped drivers." | "Changes to how compensation payouts are calculated, Insurance Premium Tax, more whiplash-style claims and rising repair bills are all piling on the pressure for cash-strapped drivers." |
The ABI said most insurers were currently making a loss on motor policies. | The ABI said most insurers were currently making a loss on motor policies. |
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