Car insurance costs: Drivers over 50 faced biggest hikes this year

Drivers over 50 have faced the steepest hikes in motor insurance premiums in the past year, according to new findings. 

The average car insurance premium for a driver between 50 and 64 was £320 last month, which is £45 or 16 per cent higher than in the same month a year ago. 

For drivers aged between 65 and 80, average annual premiums have increased by 16 per cent or £39 year-on-year to £274. 

Meanwhile, drivers over 80 have seen premiums surge by 18 per cent or £66 to an average of £435, according to Comparethemarket. 

Hikes: Drivers over 50 have faced the steepest hikes in motor insurance premiums in the past year, Comparethemarket said

While all age groups have seen car insurance costs rise in the past year, the over-50s have been hit hardest and, according to Comparethemarket, are more likely to auto-renew their policy rather than shop around and switch to a different provider. 

Since 1 January insurers have been banned from quoting customers a higher price for renewing their motor or home insurance than they would pay if they were a new customer. 

While this rule remains in place, motor insurance premiums have gone up across the board. The overall average premium across all age groups swelled by 14 per cent, or £76, year-on-year to reach £629 in November. 

The hikes come as insurers ‘pass on the higher cost of claims to their customers,’ according to Comparethemarket.   

It added: ‘The cost of car insurance claims has increased due to an uplift in the value of second-hand cars and higher vehicle repair costs.’ 

The Association of British Insurers has been warning for months that increasing pressure on the sector to absorb higher costs would eventually result in higher prices for consumers.

Premiums: A table showing motor insurance premium hikes for over 50s in the last year

Variations: Average motor insurance premium by area, according to Comparethemarket

Drivers in Greater London have endured the biggest spike in car insurance premiums over the last 12 months. The average premium in the capital has jumped by a hefty £137 or 17 per cent in the year to November. 

At the other end of the spectrum, motorists in the South West of England have seen the smallest rise in motor insurance premiums. In the South West premiums average premiums increased by 9 per cent or £37 to an average of £458.

The West Midlands also saw a relatively modest upturn in motor insurance premiums, having risen by £46 in the year to November, bringing the average cost up to £519. 

Julie Daniels, a motor insurance expert at Comparethemarket, said: ‘Drivers will be concerned that the cost of car insurance is rising, especially when household finances are already being strained. 

‘Our research shows the average motor premium has increased by 14 per cent year-on-year. 

‘However, the cost of car insurance is rising faster for drivers over 50. 

‘This could mean that these motorists end up paying much more than they need to for car insurance, as they are also less likely to switch insurers.’

According to Comparethemarket, drivers can save around £328 by shopping around for their motor insurance.  

Daniels said: ‘Our figures show loyalty doesn’t pay. By shopping around, drivers could save hundreds of pounds when their policy ends. We encourage everyone now, more than ever, to check if they could save by switching ‘

Earlier this month the Financial Conduct Authority said it believed some insurers were ripping off customers by undervaluing cars and other items when settling claims.

The FCA said it had seen evidence that some people left with written-off cars were being offered a price lower than the vehicle’s fair market value by their insurer.

In some cases, only a complaint will result in a higher offer, the regulator said. Offering a price lower than fair market value is not allowed under FCA rules.

This post first appeared on Dailymail.co.uk