Laura Whitcombe

Car insurance costs to soar

Car insurance costs to soar
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It’s been a painful week for drivers – and it’s only going to get worse. Insurance costs are set to soar and tough new penalties have been introduced for common motoring offences. Together these could cost drivers hundreds, if not thousands, of pounds. Here’s a look at what’s changed and how you could be affected.

Rising car insurance costs    

On Monday, a change to the way compensation for personal injury claims are calculated was announced by the government that will make it much more expensive for insurers. The ins and outs of the issue make for pretty dull reading (although the Daily Mail has a useful guide here) but, in a nutshell, it means as of March 20th, victims will get bigger lump sum payouts so insurers’ costs are going up. In fact, they say it’s going to cost them billions of pounds and the only way they can pay for it is to put up the cost of premiums.

The Association of British Insurers (ABI) said that 36 million insurance customers will be affected. And seeing as car accidents are a common cause of serious personal injury, it’s motor insurance premiums that are most likely to rise. Drivers who pose the greatest risk of accident – the young and those aged 65 and above – can expect to have to cough up the most. While experts are warning the average insurance customer to brace themselves for a £100 increase in their annual protection bill, those aged 65 and above can expect costs to rise by more like £300, and the ABI said young drivers’ premiums could soar by £1,000 a year.

Michael Lloyd, the AA’s director of insurance, said: ‘Premium increases are bound to be significant and will be particularly so for young drivers, who already pay the highest premiums and are most likely to be seriously injured in car crashes.

‘My fear is that this will simply encourage young drivers to take dangerous and illegal steps such as trying to get a parent to illegally “front” their insurance or even attempt to drive without cover.

‘Both will inevitably result in greater costs and yet greater upward pressure on premiums.’

Mobile clampdown

In 2015, 22 people were killed and 99 seriously hurt in car accidents that involved drivers using a mobile phone. In a bid to cut those numbers, as of yesterday motorists caught using a mobile phone while driving will face double the fixed penalty – six points on their licence and a £200 fine. For new drivers, being caught just once within two years of taking their driving test could result in their licence being torn up (more experienced drivers can lose their licences if they accrue more than 12 points in any three-year period).

Data from comparison site reveals Scottish drivers have the highest rate of conviction for using a mobile phone at the wheel. Some 19.5 per cent of drivers north of the border have been caught out, compared to the UK national average of 5.4 per cent. Londoners were the next worse offenders, with a conviction rate of 12.4 per cent. Drivers in Northern Ireland and the East Midlands had the lowest conviction rates, at 0.9 per cent and 1.4 per cent respectively.

Matt Oliver from Car Insurance said: 'In addition to the obvious road safety issues and the new tougher penalties, using your phone behind the wheel can have serious insurance implications.

'Having a CU80 conviction can seriously impact premium prices and even your ability to get insurance. Drivers with a conviction for using a mobile phone at the wheel could see their premiums increase by over £100* and that’s on top of the potential fine and points on their licence.

'Whether the new penalties will indeed reduce the number people using their handsets behind the wheel remains to be seen. However, what is clear is that for drivers caught on their phone, it will likely be the most expensive phone call they’ll ever make.'

Laura Whitcombe is knowledge and product editor at

*Based on quotes run by for a 34-year-old insuring a Ford Focus Edge 1.6, with five years’ no claims bonus, with and without a CU80 conviction, with £60 fine and three points on their licence.