Uninsured driver claims rise, pushing upward car insurance costs

An unexpected ascent inwards claims made past times victims of uninsured drivers is beingness blamed for adding to already high auto insurance costs.

Claims against uninsured drivers rose 10pc inwards the past times 12 months, to about 11,000, according to novel figures from the Motor Insurers' Bureau, the torso responsible for compensating victims.

It is the starting fourth dimension time in that location has been an increment inwards claims since 2004, when in that location were about 25,000 a year. The Bureau too pays out to victims of "hit as well as run" incidents but this is recorded inwards a sort figure.

Compensation is funded past times an annual levy paid past times insurance companies as well as is laid each twelvemonth depending on the grade of claims. This twelvemonth the levy volition live £256m, upwardly from £250m inwards 2016, spell 2018's levy has non been set.

Insurers exit on the cost of this levy to their customers through higher annual auto insurance premiums.

Ashton West, main executive of the Motor Insurers' Bureau, said: "In the past times twelvemonth or so, for the starting fourth dimension time inwards a decade or more, nosotros are starting to run into the tendency of reduction really alter direction, as well as nosotros take started to run into it increase.

He added that farther operate would live done to operate out why these claims are rising.

Rising claims against uninsured drivers is but i of a issue of factors that take pushed auto insurance costs to the highest grade on record. The average premium is at once £1,152 a year, according to the AA, the insurer.

A stupor alter inwards the "discount rate" applied to auto insurance compensation payments has pushed upwardly the value of payments made past times insurers. Likewise, the doubling of insurance premium taxation since 2011 has increased costs for insurance firms.

There is too scepticism over the industry's power to cutting premiums past times a high-profile cause non bad downward on fraudulent claims.

For a fuller analysis of cost rises across dissimilar types of drivers run into here.

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