Road news
07/03/2011
The cost of very cheap car insurance rises
Very cheap car insurance is likely to become even more important to motorists as car insurance premiums are soon to be reaching a record high.
There was an increase of 33% in 2010, and this year that price is expected to rise by another 20%. The reason for this is not more accidents on the road, as drivers might expect.
A large percentage of what customers pay for their insurance premiums now goes to cover fraud, tax and legal fees as well. Fraud cases alone usually add around £80 to the cost of a motor insurance policy.
As well as this, when the victim of an accident sends in their information for observation, some insurance companies will send on the information to other firms for a very profitable fee known as a "referral fee," which can be in excess of £500.
Credit hire companies also make charges to motorists and this also causes premiums to rise. They provide a replacement car to the victims of a car accident, charging the insurers of the person responsible.
According to leading insurers, these firms charge an average of £1,500 for every claim, not to mention adding an average of £44 to every driver's motor insurance premium.
Very cheap car insurance seems to be becoming a distant memory for many drivers, with fees being charged by many companies to cover costs of car accident, car hire, fraud and personal injury compensation claims.