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[A834]Average Car Insurance Cost

by Abbi Rouse, Abb

The news comes as research carried out by Experian reveals that the impact of the floods seen over the course of this summer has had little effect on car insurance costs within the direct sector. During the third quarter of this year, from July to September, the typical quote for a comprehensive cover policy in the market stood at some 567 pounds 30p - a rise of 0.8 per cent from the 562 pounds 70p recorded during the previous three-month period.

Meanwhile, those opting for insurance from the broker sector may be set for a particular increase in financial difficulties, which as a result may see them struggling to make payments on loans, overdrafts and other forms of borrowing.

In June, comprehensive premiums stood at 495 pounds before rising to 538 pounds a month later. Meanwhile, third party, fire and theft cover surged from 570 pounds to 632 pounds during this period. Both types of insurance are said to have risen over the rest of the summer. And with the average quote for a third party, fire and theft policy within the broker market now standing at 639 pounds 70p, it is the highest figure noted since July 2005 - the time at which the firm began gathering such information.

However, it was suggested that as a result of the flooding witnessed earlier this year, the cost of car insurance could be set to rise further. This in turn may affect consumers' ability to handle the various running costs attached to a vehicle such as repairs and tax, in addition to managing other areas of their spending such as paying utility bills and personal loans.

David Murby, managing director for Experian's insurance service division, said: "For nearly two years, comprehensive motor insurance premiums in the direct market have been higher than in the broker market". However, the recent increase in broker prices means the gap between the two markets is closing and broker prices have almost reached the level they were at two years ago, before they started dropping.

"The true impact of the floods is likely to manifest itself in insurance premiums over the next few months in the direct market once claims have been settled and insurers have been able to assess the real impact. The broker market is likely to follow suit." Mr Murby added that the recent rise noted in broker insurance costs is unlikely to have been due to the impact of the floods, as the sector often tends to "react slower" to such events than the direct market.

Consequently, those people concerned at their capacity to keep with rising expenses for running a car may wish to consider taking out a low-rate personal loan. In addition, opting for such a method of borrowing could be advisable for consumers looking to purchase an automobile as it is often a much more competitive choice than selecting a forecourt finance deal. Earlier this year, research released by Halifax showed that the average household spent some 1,509 pounds on vehicles last year - accounting for 4.4 per cent of their disposable income. Overall, the financial services firm also reported that financing a car purchase is the second most popular reason for consumers to apply for a personal loan.

As if the British public have not suffered enough in the credit crunch, we now learn that car insurance premiums are expected to soar by a record 20 per cent this year. The rising tide of of personal injury claims coupled with the increasing cost of fraud are fuelling increases for the Britain's 33 million motorists.

These rises could push the average premium for a motorist with a full no-claims bonus from around 400 to 480 pounds. Even the most conservative commentators estimate rises of at least of 10 per cent. The insurers warn that despite doing their best to hold down car insurance premiums there may be no alternative to this happening.

Speaking recently, a senior executive of a major UK brokerage group, said: 'My understanding is that car insurance premiums are 20 per cent lower than they should be. That means thay are seriously adrift. It is inevitable that within the next 12 months there will be a significant correction'. This will be a major blow to many motorists especially following on top of the increases we have seen in pertol and diesel.

The growing cost of insurance payouts - higher medical costs, higher repair costs, more no-win, no-fee claims pursued by 'ambulance chasing' lawyers - was fuelling dearer premiums. The Automobile Association has also warned of rises but put the figure nearer 10 or 11 per cent over the coming year.

Their spokesman said: "It is certain is that the average premium will rise, but the question is by how much? Some suggest a rise of 20 per cent over the next year and certainly, a rise of that magnitude will be required if the motor insurance industry is to achieve a profit on underwriting. At the moment, for every 100 pounds spent on premiums, insurers are paying out approximately 105 pounds."

Fraud costs have risen by about 17 per cent over the past year and that aspect alone costs around 30 pounds for every private car insurance policy in force. A further 30 pounds pays the costs of accidents involving uninsured drivers, although police are beginning to make inroads into that problem halting this blight on honest motorists. At least that is encouraging news.

Industry sources put the number of people that claimed for whiplash injury last year at 430,000. And the total compensation bill of 1.9 billion pounds is equivalent to about 66 pounds on every policy. Whiplash accounts for about 66 per cent of all personal injury claims in Britain - that is 40 per cent higher than the European average.

According to a survey of over 80 insurers, during the last year, the average 'shop-around' premium for a comprehensive policy has risen by 8.7 per cent to 486.45 pounds. But the car insurance market remains fiercely competitive. Online applications and price comparison sites have encouraged customers to shop around when their renewal date arrives and insurers are trying to keep premium increases as low as possible to avoid losing customers.

We can only repeat our the advice to shop around - get online and find an independent site which has access to virtually the entire insurance market. Then you can be as sure as you ever can, that you will get the right deal at the right price.

Article Source : I Need Auto Insurance

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Both Abbi Rouse & Michael Challiner are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Abbi Rouse has sinced written about articles on various topics from Personal Finance, Careers and Job Hunting and Diabetes Treatment. Abbi Rouse writes for AllAboutLoans.co.uk, an comparison site, visit us today for information on all loan topics including. Abbi Rouse's top article generates over 49500 views. to your Favourites.

Michael Challiner has sinced written about articles on various topics from Finances, Advertising Guide and Quit Smoking. Because of the credit crunch car insurance is rising. However Brokers Online can offer great deals on cheap . Visit Brokers Online. Michael Challiner's top article generates over 165000 views. to your Favourites.