Sky-high car insurance costs to be tackled by new taskforce
Labour forms a new taskforce to tackle the issue of car insurance, with premiums having risen by 21 per cent on average in the past two years
The government has established a new taskforce to combat sky-high motor insurance premiums, which have risen by over 20 per cent in the past two years.
Following a pre-election promise to call in industry regulators to fix the spiralling issue of car insurance, the transport secretary, Louise Haigh, has founded the new taskforce with the likes of the Association of British Insurers (ABI), Citizens Advice and the price comparison site Compare the Market.
Working alongside the Department for Transport, the taskforce intends to pinpoint the factors driving up the costs of car insurance and evaluate whether motorists are getting fair value for money.
In a statement, Haigh said car insurance was “essential, not a luxury”. She continued, stating that the “new expert taskforce is a major step forward in delivering a fair deal for drivers. It will give this issue the attention it deserves – rooting out the factors driving up costs for industry and ensuring drivers are able to hit the road.”
The news comes as new data from the Financial Conduct Authority shows that the average car insurance premium has risen by 21 per cent since June 2022 – much more than in the likes of France, Germany and Spain. Earlier this year, Citizens Advice told the Transport Select Committee that some people are “having to make impossible choices of whether to pay for their car insurance or put food on the table”.
The government is keen to highlight how it is already tackling one of the issues propping up the cost of cover with its redirection of HS2 funds to support its pledge to fill one million potholes per year. However, nothing has been said on how it intends to suppress the UK’s car-theft epidemic – an issue a third of Brits claim to have been “decriminalised”, given that only two per cent of cases nowadays result in someone being charged.
Regardless, the chair of the ABI’s committee for motor insurance, Colm Holmes, described the move as “a clear step forward as we can make more headway on this complex issue if the industry, regulators and government try to tackle it together.”
In the meantime, something that could potentially bring down the cost of car insurance is the new Vehicle Risk Ratings (VRR) scheme. A replacement for the current insurance group system, VRR will assess each vehicle on five characteristics – performance, damageability, repairability, safety and security – to provide insurers with more insight with which to base quotes upon. All new cars entering the UK market from 1 August will adopt this system, with a full rollout expected in the next 18 months.
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