Reacting to news from the Association of British Insurers that motor insurance premiums are now rising at their fastest rate ever, RAC Insurance director Mark Godfrey said:
“This inflation-busting increase in average car insurance premiums is a serious concern and one that demands urgent action from the Government.
“There are two main variables at play that are causing the jump in premiums – the change to the discount rate for life-changing personal injury compensation claims that was made in February, and successive rises in insurance premium tax, the latest stealth tax to affect drivers. Both of these have been brought about as a result of decisions by the Government, and are therefore within its power to review and change.
“The result is that every motorist is paying substantially more for insurance, a mandatory requirement for driving on our roads. New drivers whose premiums are naturally higher are especially hard hit, and if ever there was a time for the Government to consider lower levels of insurance premium tax for those drivers that opt for a telematics-based ‘black box’ insurance policy, now is surely it.
“These figures should be a wakeup call to the Government that, without action, premiums risk spiralling out of control.”