The cost of car insurance is climbing for the first time since 2017, according to The AA’s British Insurance Premium Index.
During the last quarter of 2018, the cost of a fully comprehensive policy rose by 2.7 percent to £609.93, with the pound’s Brexit-related plunge making vehicle repairs more expensive.
In 2018, premiums were reduced following changes in the Ogden rate, used to calculate compensation for personal injuries, but the Civil Liability Bill, which means drivers will receive a smaller payout for whiplash injuries, won’t take effect until April 2020.
The bill introduces a fixed tariff for whiplash damages, along with a rise in the small claims limit to £5,000 for road traffic accident claims. It means that legal costs cannot be recovered when the damages are under the limit.
“But underlying all of this are concerns surrounding Brexit,” said AA’s director of insurance, Janet Connor.
“Regardless of what the final deal looks like, the market has continued to battle with the value of sterling. This has led to the rising cost of imported car parts, further adding costs to the car repair industry which ultimately finds its way to the premiums we pay.”
Green Card woes
Insurers are warning UK motorists of the need to arrange extra documentation in the event of a ‘no-deal’ Brexit. Last year, the Department for Transport issued guidance notes for vehicle insurance following a no-deal scenario, stating that access to the Green Card-free circulation would cease.
Huw Evans, director general of the Association of British Insurers (ABI), said: “As it looks increasingly possible that a no-deal Brexit may happen, we want all insurance customers to know the facts about what this means for them.
“If you live in Northern Ireland and drive to the Republic of Ireland, or if you plan to drive your vehicle to mainland Europe after a no-deal Brexit, you will need a Green Card to prove you are insured.
“You should contact your insurer before you travel in order to get one. This advice applies to businesses as well as individuals.”
Green Cards are currently issued free-of-charge, but insurance providers may increase administration fees to reflect production and handling costs.