Car Insurance Premium Higher In UK because of Hi Tech Cars
The car premium insurance cost has got higher in last three years in UK.
In UK most of the car owners have premiums for their cars. High tech car owners you must know that premiums have hit a highest record. The reason behind this is all the motors are now made with complex electronics that is more expensive to repair. According to UK Association of British Insurers (ABI) an average annual premium policy cost £462 in October, November and December 2016. But, in 2012 the highest premium figure was £443. Undoubtedly, the figure is increasing every year and government are trying to solve by limiting compensation payments and cut court costs.
There might be a lot of reason behind increase of rise cost of car premium insurance. But, the major reason behind it is due to complex electronics system. These car’s has higher repairing cost at the end of the day. The second obvious reason is getting new spare parts become more expensive now a days.
According to reports an average repair bill has gone higher around 32% over the last 3 years to £1,678.
The authority ABI has warned that premiums will increase higher day by day. If the UK government went ahead with plans to review the so-called discount rate.
Whenever an accident occurs the victims usually get a lump sum in compensation. Later the sum is discounted to make up for the extra investment return they are likely to receive from premium.
As of 2001 discount rate been been fixed 2.5%, Which is based on investment returns from government bonds. If the government reduces the rate, insurance companies will have no option to pay out more and the result would be increasing the premiums more.
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