If numbers from the Association of British Insurers (ABI) are anything to go by, then it looks like now isn’t a very good time to be a young driver in the UK.
According to ABI’s analysis, motorists aged between 18 and 21 are finding themselves allotting 10% of their average annual salary for motor insurance payments. That equates to an average of £973 for comprehensive cover, or all of a young driver’s salary from January 01 to February 06.
In comparison, the average proportion is 2% – meaning young drivers are paying five times the average proportion of the typical salary for all motorists. Drivers aged 50-59, for instance, are paying the lowest proportion at 1.3% of salary on average.
“This highlights that younger drivers are feeling the impact of rising motor insurance bills, caused by factors such as the current way compensation payouts are calculated and a resurgence in whiplash-style claims, the hardest,” said the trade body, which is calling for government action to address the premiums issue.
The ABI wants the government to introduce its Ogden rate reforms “without delay” to ensure what the association described as a fairer system, not only for claimants but also for taxpayers and insurance customers in general. It is also urging the government to go ahead with reforms to how lower value whiplash-style claims are handled.
Other actions being pushed by ABI are freezing the Insurance Premium Tax rate and implementing Graduated Driver Licensing.
“More than any other drivers, young motorists need relief from rising motor insurance premiums,” said ABI director of general insurance policy James Dalton. “While telematics technology is helping many young drivers manage their insurance bills, cost pressures keep mounting.
“The government has a key role in helping keep motor insurance costs under control, and this latest analysis highlights why they need to implement their proposals to reform personal injury compensation and lower value whiplash-style claims as soon as possible.”
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