Scots pay less for motor insurance


Scottish motorists continue to pay less for their car insurance than others areas of the UK, but the cost of the average premium has increased sharply in the past 12 months.
Research conducted by Consumer Intelligence shows that the average annual motor insurance premium in Scotland now stands at £474 (the lowest in the UK, equal with South West England), 16.6% up on a year ago.
The average for the UK as a whole is £666, up 15.7%.  Nearly half the increase happened during the three months to May as Government compensation rules came into effect. 
According to Consumer Intelligence, action by regulators to cut the discount or Ogden rate governing payouts in major personal injury claims to minus 0.75% from 2.5% effective from 20 March is driving the rise in bills.  June’s Insurance Premium Tax rise will further add to the pressure.
“Price rises had been levelling off at the end of last year but are now rising rapidly as the full impact of the discount rate cut comes into effect,” John Blevins, Consumer Intelligence’s pricing expert, said.  “Government plans to review the Ogden rate have so far taken a backseat following the Election, although there is some relief from plans to push ahead with whiplash reforms announced in the Queen’s Speech.
“However, with the impact of the latest Insurance Premium Tax rise still to come into effect, drivers need to shop around to limit increases in premiums.”
The most expensive area for motor insurance is London, with an average annual premium of £1,000.  Drivers aged between 21 and 24 pay the highest average price at £1,202, but have seen slightly lower annual premium increases of 13.1%.  Over-50s motorists are experiencing the biggest rise at 17.9%, but pay a premium of £418 on average.
There is some relief for younger drivers, however.  Premiums for 21 to 24-year-olds are rising slightly more slowly due to increasing use of telematics, or black box technology.  Around 62% of the best buy policies for young drivers are now telematics.
The impact of telematics, which rewards good driving behaviour, is even spreading to older drivers – 11% of the best deals for those aged 25-49 are from telematics and 8% for over-50s.