By: Luke Jones, Published on July 11, 2017 08:28 AM, Last Update on July 11, 2017 05:30 AM
Ontario is among the most expensive auto insurance markets in the world, but drivers in other countries are also seeing premiums soar. In the United Kingdom, all drivers across all demographics are seeing a significant increase in the amount they are paying for coverage. Indeed, most motorists are now paying record amounts for their car insurance.
The Association of British Insurers (ABI) warns that unless the government steps in, rates will continue to escalate. The ABI reports all age demographics faces premium increases on average through 2015 and 2016. One exception is the often expensive under 21 demographic, which has been kept under control by telematics and usage based insurance.
Telematics are increasing in younger demographics and the UK has been a leader in bringing the technology to customers. ABI says customers in their late 50’s and late 80’s faced the highest increases, averaging an extra (GBP)£35 per year.
Despite premiums remaining under control, drivers aged between 18 and 20 still pay the most on average for their auto cover, £973. The age group 66 to 70 pays the lest, £260 on average. It is worth noting for our Canadian readers that even the high-end average premiums of £973 for young drivers is around the same ($1666 Canadian) as the average premium for all motorists in Ontario.
The British government has cut the personal injury discount rate, “which massively increases claims costs and will inevitably lead to higher premiums,” the ABI release said.
In the 100 days since the injury discount rate was cut, “there has been no decisive action to address the issue,” the release said. “This is despite the discount rate costing the [National Health Service] £1 billion a year and increasing insurance claims costs, making rises in premiums inevitable. At the time of the cut, analysts PwC estimated this could see premiums rise by up by £50 – £75 on average, with young people facing the biggest increases.”
ABI director general Huw Evans said that all affecting factors are combining and “it’s concerning that the government have yet to commit to delivering a fairer system for setting the personal injury discount rate. We’re pleased the government are going to bring forward a civil liability bill to reform whiplash style personal injury compensation, but the benefits could be wiped out if they don’t defuse the discount rate bombshell.”