Car insurance costs have risen after changes to the Ogden rate, leaving motorists forced to pay extra money for basic insurance packages. On average premiums have risen by 0.7 percent over the past three months with prices now two percent higher than in 2018. The over 50’s have been hit hardest by the increase, with the demographic recording a price rise of 3.6 percent over the past 12 months. Drivers between the ages of 25 and 50 also saw a staggering three percent rise to push premiums up to almost £700 a year.
The data from analytics experts Consumer Intelligence also shows a dramatic hike in costs for residents of the West Midlands where prices rose by 4.6 percent over the past year.
The region now has the second most expensive car insurance prices in the country with an average fee of £903.
London leads the way with an average premium of £1,171 after the capital saw another price rise of 3.6 percent over the past year.
Scotland also saw price hikes of over three percent as increases of above two percent were recorded in the North East, Wales and the East Midlands.
Average overall car insurance premiums have increased by 22.6 percent since October 2013 but the fees are still ten percent cheaper than prices in September 2017.
It was not all bad news though, with areas of Yorkshire and the Humber and the South West actually showing a decrease in premiums from 12 months ago.
Young drivers below the age of 25 also witnessed dramatic 3.2 percent price fall to reduce costs to an eye-watering average of £1,673.
Declines in premiums for young drivers was partly down to a rise in black box telematic insurance policies, with 64 percent of the top five cheapest quotes for the demographic using the technology.
John Blevins, pricing expert at Consumer Intelligence said: “Pricing at an overall level will be driven by claims experience and the impact of the Ogden discount rate.
“Many insurers feel misled by the Government and had planned for a more favourable discount rate being set.
“As such, premiums are being adjusted to compensate for the cash injections on to claims reserves made by many insurers.”
The Ogden rate is used to calculate personal injury claims and was adjusted from -0.75 percent to 0.25 percent in August.
The change means higher than anticipated compensation payouts for accident victims which have made costs rise.
In July, the Association of British Insurers said the new rate would add additional costs for insurers that would likely be passed down to customers.
Recent data from Confused.com revealed the price of car insurance has also increased by three percent over the past three months.
The £27 increase was the third consecutive monthly rise for the site’s index which reveals the average annual cost is now just shy of £800.
The site claimed the prices were some of the highest increases in 18 months in more damning concerns for UK motorists.
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