Successful car accident claims and the high cost of car repairs are set to push car insurance premiums up over the next five years.
A leading market analyst has estimated that motor insurance pay outs are set to rise from £8.5 billion in 2007 to £10.9 billion by 2012.
The good news is that improvements in road safety are helping to reduce the number of road traffic accidents on our roads, but the cost of payouts for car accident compensation is increasing due to increases in legal and medical costs.
Over a four year period between 2002 and 2006 there was a fall in the numbers of road traffic accidents from 222'000 to 189'000, but the average payout over the same period rose by over a thousand pounds per claim.
The author of the report cited the rising cost of replacement parts and the increase in garage repair bills as a large contributing factor to the payout increase in car accident claims.
*A replacement vehicle can usually be supplied within 4-6 working hours, where there is an admission of liability from the other person’s insurance company. If this person is not known, their insurance details are not known, they are uninsured or there is a potential dispute over who caused the accident, a replacement vehicle cannot be provided.
