The cost of car insurance in the UK has hit an all-time high

The cost of car insurance has reached an all-time high in the UK, with the average insurance premium valued at a record breaking £971 a year, according to  Bdaily. Part of the reason for this rise is down to the 1.4 million people who don’t have insurance in the UK (Source: Bdaily, 2012).  This has resulted in increased costs for the honest and obliging proportion of people who do pay.

Added costs for motorists

Those who are breaking the law and not paying for their car insurance are costing the economy around £500 million a year, as well as pushing up premiums for every other legal driver in the country. Widespread criticism has ensued. Drivers who are keeping to the law feel that the current penalty for those who are caught without insurance is too low. As it stands, the penalty for driving without insurance is six penalty points on the driver’s license or a £200 fine. Some drivers feel that this doesn’t even add up to the cost that motorists have to pay out each year to buy their insurance.

Students and young male drivers feel the pinch most of all

The news doesn’t bode well for students and younger male drivers, who already pay more for their insurance premiums due to the fact that they are 10 times more likely to be involved in an accident than male drivers over the age of 35 (Source: The AA). These high premiums put a strain on the driver’s finances, especially when road tax, MOT and fuel prices are an additional expense.

However, it’s not only the younger drivers who are feeling the brunt of rising insurance premiums. Even businesses such as taxi drivers and Small Medium Enterprises (SMEs) are paying out more on transport costs. Families are also noticing a difference, as cuts are being made in order to pay out for their premiums.

Checking your own premiums

As bad news such as the above breaks out, it’s a gentle reminder for you to check your car insurance premiums and see if you can reduce your costs. Some demographic groups within society, such as the over 50’s, can benefit from cheaper car insurance if they manage to find a suitable company that offers such a service. It’s certainly one way of tightening your belt in order to gain more money to spend on day-to-day living.

Unfortunately, women drivers will no longer be able to benefit from cheaper insurance when compared to male drivers, after the European Union judges passed a ruling meaning that risk assessment can no longer based on the gender of a person (Source: Daily Mail, 2011). However, this doesn’t mean to say that women can’t focus on bringing the cost of their premium down, too. If more people in the UK decide to break the law and not pay for their motor insurance then there will potentially be a knock-on effect and further premium cost increases for the law abiding. Some people are happy to take the risks without realising the full consequences but for the majority of people this means they have to pay out more.