It is being forecast by ERS that specialize in proving motor insurance policies that the cost of insuring your vehicle is going to increase significantly by the beginning of next year. That prediction will give concern to many motorists.
If ERS is correct, premiums for standard car insurance could increase by an average of 20% per annum from £300 to £360 per annum – a rise of £60 per annum by January 2018. Motorists requiring to insure a commercial vehicle such as a taxi could be faced with an even larger increase with premiums going up by as much as 29% per annum. In monetary terms, this is a rise of £720 per annum to more than £3,000 a year.
There are a number of factors that lead ERS to forecast such average increases in motor insurance premiums. For instance, the cost of repairing a vehicle damaged in a road traffic accident is expected to go up. There is another increase in Insurance Premium Tax (IPT) on the way as on the 1st June 2017 this tax is to go up by 2% per annum from 10% to 12%. Also, the Ogden Discount Rate has been reduced from 2.5% to -0.75%. This is the interest rate used by insurers when assessing how much capital needs to be set aside to provide a seriously injured party with suitable compensation. This change will require insurers to set aside greater lump sums than they have previously had to do.
Therefore, it is important that when you receive your motor insurance renewal notice or are looking for cover for the first time that you get a few quotes to compare them to try to make sure that you are getting a competitive premium. If your existing insurer cannot match or better the quote you have received from another insurer on a like for like basis then there is nothing to stop you switching insurers when your policy comes up for renewal. There are a variety of ways in which you can obtain car insurance quotations including using a number of price comparison websites.