Car insurance has become more expensive than ever before
Motorists are now paying an average of £666 for their coverage, which is an all-time high.
According to research by Consumer Intelligence, premiums have elevated more than five times the current rate of inflation to 15.7%.
Almost half of the increase last year occurred in three months to May, and the premiums have increased by over a third since October 2013.
Consumer Intelligence blamed the rise on a cut to the discount rate on personal injury claims in March from 2.5% to -0.75%.
The rate is used to determine compensation payments handed to accident victims to consider the extra interest they could gain. The fact that it is now a negative rate means that there are higher pay outs for insurance companies, leading to inflated premiums for car owners.
The rise in Insurance Premium Tax to 12% from 10% last month will have taken its toll on drivers, which will add an estimated £13 to the policy if insurers pass the tax on to motorists, this is eventually expected to increase to 20% in line with VAT.
Over 50s insurance has seen the biggest increase of all with a 17.9% rise, but still pay the least of any age bracket (£418).
Drivers between 21 and 24 years of age pay the most for their policies with an average of £1,202 but saw a below average rise of 13.1%. According to Consumer Intelligence, this below average change is down to cost-reducing black boxes, with 62% of the policies for younger drivers use telematic technology.
Drivers living in London are still the highest paying area with an average of £1000, which is more than double Scotland and South West where the average price is £474.
Up until this year rates increases were fairly flat but since the start of 2017 we have seen substantial rises especially since the Insurers price the cost of Ogden rate rise into their premiums.
The Governments after facing a huge backlash from the Insurance industry had planned to review the rate increase but the general election and fallout from this now seems to have taken precedent.
