Motorists’ anger at rocketing insurance

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Wigan motorists have seen their insurance premiums rocket by an inflation-busting 12.8 per cent in a year.

The staggering increase to an average of £906 per vehicle has propelled the borough - and the North West as a whole - to second in the national table of most expensive pay-outs, beaten only by London’s which are just £4 dearer.

Third place is the North East, way below on £570!

It means that Wigan drivers’ premiums had soared by five times the rate of inflation in the year ending in February this year.

Average national prices hit £661 and action by regulators to cut the discount rate governing payouts in major personal injury claims and another increase in Insurance Premium Tax mean they will continue to accelerate.

There is some good news for younger drivers: premiums for 21 to 24-year-olds are rising slightly more slowly at 7.8 per cent a year thanks to increasing use of telematics – black box technology which rewards good driving behaviour.

But 21 to 24-year-olds pay the most at £1,176 a year compared with £372 a year for over-50s and £647 for those aged between 25 and 49, the data from Consumer Intelligence, which is used by the Government’s Office for National Statistics to calculate official inflation statistics, shows.

Prices for 21 to 24-year-olds have only increased by 3.9 per cent since October 2013 compared with 35 per cent for over-50s and 25.7 per cent for 25 to 49-year-olds.

Consumer Intelligence pricing expert John Blevins said: “There are already signs that the discount rate ruling is having an impact on premiums and the next IPT rise in June will add to the

pressure.

“There were signs that price rises were levelling off but that is sadly no longer the case with all indications now that the only way is up.

“With inflation running at 2.3 per cent it is clear that drivers, who have no choice over whether to buy insurance, are facing a squeeze on their budgets.

“Black box technology is helping younger drivers to some extent while the price rises for over-50s at around 10.8 per cent a year reflect how insurers are adjusting risk to reflect the fact that our ageing population is driving for longer.”

The impact of telematics has grown rapidly – 53 per cent of the most competitive quotes for younger drivers are on black box policies compared with just 33 per cent three years ago.

Drivers in Scotland pay the lowest prices but motorists in Wales are seeing the lowest average price rises.