Between September and December, annual premiums for car insurance rose by 8.6% compared to the same period in 2014, according to figures from the British Insurance Brokers’ Association (BIBA) and Acturis.

In real terms, the cost of motor policies is up by more than 12% when the 58% increase in Insurance Premium Tax (IPT), which came into effect on 1 November last year, is taken into consideration.

In comparison, home insurance costs actually fell by 4.8% in the last three months of 2015, compared to the same period in the previous year.

Worrying increase

Steve White, CEO at BIBA said: “BIBA has said many times that IPT is a tax on protection and affects the affordability of insurance. The motor insurance industry has worked hard to tackle fraud to help minimise rises in premiums so it’s particularly worrying to see such a significant increase fuelled by the IPT rise especially in a period when we are seeing the number of uninsured drivers rising.”

He adds that BIBA is committed to fairer premiums for customers who find themselves paying for fraud and uninsured drivers.

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