Young Motorists May See Premiums Rise Significantly

Unfortunately, it tends to be the younger driver who ends up paying the most for their car insurance because they are more likely to be involved in a road traffic accident. It is the young motorist who can possibly least afford to pay for the cover but it is a legal requirement to have car insurance in place.

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The cost of motor insurance for young drivers could rise following an impending change in the Ogden Discount Rate.

Well, it has recently been announced by the Ministry of Justice that the Ogden Discount Rate is shortly to change as a result of which it is expected that motor insurance premiums may increase. The rate is currently 2.5% but it is being reduced to -0.75% meaning that insurance companies will need to set aside more money to meet claims for compensation due to someone being very seriously injured in a road traffic accident.

Whilst it is being forecast that, on average, premiums will increase for all motorists it is the young driver who will be hit the hardest. Such drivers aged between 18 to 25 could be faced with increases of up to £1,000 per annum. You will no doubt agree that is a huge increase. The reason for this is that, apparently, it is the young motorist who tends to be involved in more very serious road traffic accidents than older motorists.

Of course, to compound matters, the Insurance Premium Tax (IPT) is due to increase yet again in June of this year. This time the increase is going to be 2% taking the tax to 12% and there is nothing that the motorist can do about this.

Having said that, motorists can shop around to try to get a cheaper deal on their car insurance than they are presently paying as there are dozens of car insurance companies that are keen to take on as much business as possible. So, if your policy is due for renewal or you are seeking cover for the first time, why not spend a little of your spare time and obtain a number of quotes to see if you can save any money but making sure that the cover meets your requirements.