Why is my insurance so high? (and will it get better?)

Insurance costs in the UK are a constant source of annoyance for drivers and one of the major ongoing costs of driving.

It will be no surprise to drivers to discover insurance costs across the UK are on the rise. According to Confused.com the cost of comprehensive cover increased by 4.9 per cent in the past 12 months while third part, fire and theft (TPFT) insurance costs have increased by a staggering 10.2 per cent in the same period.

It’s a worrying statistic and highlights the importance of taking measures to keep your insurance costs down, as our guide to getting cheaper insurance explains.

However, recent research show some people will be subjected to greater rises in car insurance than others.

According to Confused.com drivers in Bradford are the worst hit with insurance prices increasing by a whopping 17.1 per cent in 2011. This was followed by Oldham (14.8 per cent), Manchester (14.4 per cent), Ilford (13.1 per cent) and Blackburn (12.7 per cent).

While some places did see insurance prices fall – mostly in Scottish areas such as Falkirk, Edinburgh, Dundee and Inverness – but overall insurance prices have risen by up to £107 (for TPFT) in the past year.

See the cheapest cars to insure

But why is this? A recent report from the House of Commons Transport Committee is quite clear where the blame lies.

It says whiplash injury claims are the main cause of rises in motor insurance premiums and the widespread use of ‘secretive’ referral fees to personal injury claims specialists.

Whiplash injuries are typically subjective and as a result insurers are less likely to defend the case in court, leading to an increase in both genuine and fraudulent claims.

Now MPs want to make the criteria for whiplash injury payouts stricter to discourage claims and urges laws to include evidence of ‘a significant effect on the claimant’s life’ before compensation is paid.

Will it happen? The report has made some strong recommendations to change the process of insurance claims.

There is a long way to go but there may just be some light at the end of the tunnel for UK drivers when it comes to paying their annual premium.