Insurance Premiums Too High

Insurance Premiums Too High

by Becky Harrison |
posted 08 September 2020

The Government’s delay in the implementation of its whiplash reforms has cost British motorists £1.3 billion in extra car insurance premiums, according to research by comparethemarket.com. The Ministry of Justice announced in April that the implementation of the whiplash reforms as part of the Civil Liability Act would be delayed for a second time from 1 August 2020 to April 2021, back from an original date of 6 April 2020, citing the coronavirus pandemic as the reason for further delay. The legislation would have taken around £35 off average premiums. However, the delay has meant that premiums remain higher than they should be.

In addition, following multiple hikes to the Insurance Premium Tax (IPT) rate, the average motor insurance premium is around £75 more expensive because of the tax. This increases significantly to £126 among young people (aged 17 – 24) who already pay the highest because they are considered riskier drivers to insure.

This follows recent research which found that one in five young people have stopped using their car as they can no longer afford to run it as a result of the coronavirus. Young people have been most affected by the economic impacts of the coronavirus with 37% of the age group expecting to be made redundant or have to take a pay cut – the highest of any age group.

Cars can be essential to secure and maintain a job. The research found that over half of young drivers believe that not being able to afford to run their car will negatively impact their ability to get a job, while almost 60% say that it will negatively impact their ability to get to work.

To help ensure that young people are able to stay on the road, comparethemarket.com is calling on the Government to support younger motorists by providing an IPT exemption on motor insurance premiums for 17 – 24-year olds.

 

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Becky Harrison
Becky Harrison

Becky is part of the marketing team here at Money4yourMotors. Becky oversees a wide range of marketing activities including social media and content creation.