High premiums may force rise in uninsured motorists
Experts in the world of motoring are warning that a sharp hike in the price of insurance premiums could result in more people driving uninsured. In just three months, the price of an average premium has risen 11 per cent to £704. The worry is that it is young drivers, or those on low incomes, who will be hit hardest. In the last quarter, the insurance cost for a male driver who is under 21 has risen by just over 15 per cent. This means that he will have to pay at least £1,000 per year for cover.
Motoring organisations are warning that increasing insurance costs could result in 1.5 million drivers taking the UK roads without insurance, preferring to gamble with detection, rather than pay out for a hefty premium.
President of the AA, Edmund King, warns that it is the young drivers, who are already paying a high rate for third party fire and theft, who will decide to risk taking to the roads uninsured.
Mr King added that insurance companies had a responsibility to look after their future customers by adapting to their needs and offering sensible insurance solutions. He went on to say that some sort of ‘pay as you drive’ insurance might be the answer, rather than just putting insurance up to a level which encouraged people to break the law.
The insurance industry claims that it is already losing out on vehicle insurance. Apparently £10.6 billion is taken from those purchasing insurance each year, but £11.2 billion is paid out by the insurance industry each year. The Association of British Insurers says that the cost of paying out on insurance claims is now just too expensive.