Every year, Sainsbury's Bank puts out their Car Insurance Index, which is a snapshot of UK car insurance premiums and a look at how the industry is changing. According to their report, which came out at the beginning of September, the average cost of car insurance has gone up by 4.2% since June 2006. Most people are paying about GBP19.80 more this year than they did last year to insure their cars.
Car insurance premiums are going up, but not everyone is being affected the same way. How much your car insurance has gone up and is likely to go up depends a lot on your gender and age. According to the numbers that Sainsbury's gave, the cost of car insurance for men has gone up faster than for women. Between June 2006 and July 2007, the average car insurance premium for men went up 5.2% to £518.46, while the average premium for women went up 3.1% to £442.28. Men are often thought to be a higher risk than women because they tend to take more risks. This is backed up by statistics, which show that men have more accidents per capita than women of all ages.
Age is another big factor in how much you pay for insurance and how much it has gone up in the past year. Since July 2006, insurance rates have gone up a whopping 11.2% for drivers under the age of 25. The next biggest rise was for drivers between the ages of 25 and 40. This is because people in this age range tend to drive more than other drivers. Overall, car insurance rates for people in this age group went up 5.81 percent. The only age group whose rates went up the least was drivers 65 and older, whose rates went up by only 2.7%.
When you add the average rise in auto insurance premiums to the fact that the groups whose premiums went up the most already had the highest premiums (males up to age 25 in particular), it becomes clear how much more expensive it is to drive in the UK this year than last.
Surprisingly, most drivers don't switch insurance companies, even when their rates go up by a huge amount. Most people think it's easier and more convenient to stick with the insurance company they already have than to look for another one that might have better rates. When it's time to renew, only about 1 in 5 drivers even bother to get quotes from other insurance companies. This could be costing them a lot of money. Even though not everyone can find lower rates by shopping around, most drivers who switch their car insurance save about GBP100 per year.
Of course, the quote with the lowest price might not be the best deal or save you the most money in the long run. You could lose the GBP56 you saved on the premium if someone throws a rock through your windshield and you don't have windscreen coverage. So, when you're looking for the best car insurance policy, it's important to compare the whole policy, not just the price.
A good plan is to use two price comparison sites like CompareTheMarket.com and Tesco Compare to get quotes from most of the UK market and then contact the insurers directly to check premiums and compare policy features.
