With the economic gloom set in, it is increasingly difficult to increase savings. The increasing in car insurance cost is not really helping things. Premiums of car insurance are increasing over the past few months. Some analysts predict that the increase in cost over the past year has been around 40%. Insurance companies complain that although the auto insurance premium is rising, they are not getting profit owing to a number of factors. On the other hand, with no increase in accident claims, people wonder whether it is even worth paying the high insurance premium amount.
There are several factors to the rising cost of insurance premium-
1) Fraud- There are many people who stage deliberate collisions and extract money from the insurance company. This leads to increase in the fees charged via premiums, from honest policyholders.
2) Not having insurance- There are many people on the streets, who have not bought insurance. As per statistics, 23,000 people get injured owing to clumsiness of uninsured drivers every year. Although most insurances covers accident claims by uninsured drives, this comes with an additional premium fee, which may be quite high.
3) Increasing number of claims- The cost of claims has added approximately 10% to the premium as per Association of British Insurers. When insurance companies have to face a personal injury claim, they have to pay a significant amount as legal charges. Companies are often in search for quality personal injury solicitors. If you are in are in the UK, you can try out personal injury solicitors from Croftons Solicitors LLP, which has a reputation of being one of the best players in the niche.
It is important to understand some of the reasons as to why the auto premiums are rising throughout the country.