Young and old suffer as drivers hit by insurance cost rises

Thecostofcarinsurancerosein thelastquarterof2017,pushing up the average comprehensive premiumtoalmost£600ayear.

According to an analysis of oneandahalfmillioninsurance quotes, the average policy cost increasedbyfourpercentinthe last three months of last year, despite an overall drop across the full year.

Alongwithrisingfuelprices the change in insurance costs mark a bleak start to 2018 for motoristswiththeaveragepremium now costing £574.11, up from £553.28 in October.

There were wide variations across the country with some regions seeing a near-10 per cent increase while other areas enjoyed reductions of between one and four per cent.

Drivers in Lincoln were hardest hit by increases - the average premium in the LN postcode rising 9.21 per cent, or £36.83, to £436.67. Wolverhampton (9.11 per cent) and Wakefield (8.74 per cent) were next worse-hit.

Motorists in Sutton, by contrast, saw a 3.96 per cent reduction in their premiums, although the £24.88 drop still left them paying £603 on average. Preston and Guilford saw more modest reductions - 2.6 per cent and 1.97 per cent, respecetively - but both enjoyed lower-than-averagepremiums of £557.85 and £444.31.

East London remains the most expensive place to insure your car, with premiums sittingat£1090.65,whiletheShet landIslandsarethecheapestat £310.80

Despite the rise in premiums the final three months of 2017 were still cheaper on average for motorists than the same period in 2016. But not everyone enjoyed the overall reduction, with some of the youngest and oldest drivers being hit by rises.

Those aged over 65 saw the average year-on-year cost of a fullycomprehensivepolicyrise sevenpercent,from£254.06to £273.02. Those aged between 21 and 24 were also hit with a seven per cent increase, with the average policy rising from £1,055.90 to £1,128.94.

According to Moneysupermarket, which analysed its database of applications to get the information, three key factors affected premiums in 2017 - changes to the “Ogden” discount rate, the increase of insurance premium tax (IPT) and an increase in fraudulent claims.

The Ogden discount rate, which determines how much compensation insurers pay to the most seriously injured accident victims was changed in March, moving from 2.5 per cent to -0.75 per cent, dramatically increasing the amount paid out.

IPT also increased for the third time in two years, rising from 10 to 12 per cent in June and fraudulent claims for nonexistentorexaggeratedinjuries are thought to add around £40 to every car insurance policy.