Insurers quicker to hike premiums after offences

| April 13, 2012 | 0 Comments
Insurers quicker with premium hikes after offences

Insurance companies are becoming quicker at raising the price of motor premiums when the driver has committed an offence such as speeding or using a mobile phone, according to the AA.

Insurers often used to ignore a first SP30 speeding offence, but it is now likely to result in the driver’s car insurance premiums increasing over three years.

The AA’s study found that drivers with one conviction for speeding are between 10 per cent and 12 per cent more likely to make a claim than drivers with a clean licence.

It is this increase in risk which causes the premium cost to rise.

When the additional insurance costs are added to the £60 speeding fine, the offence may cost the driver more than £200 in total.

It may prove cost effective for first offenders to take a speed awareness course.

Although these cost around £90, drivers will escape having points on their licence and taking the course could keep premium costs down.

Motorists caught using a mobile phone while driving will also find that their motor insurance costs significantly more, and in some cases it may be withdrawn altogether.

Using a mobile phone without a hands-free kit is considered a more serious offence than speeding as drivers may accidently drift over the speed limit, whereas using a mobile phone while driving is a deliberate act.

While car insurance prices fell slightly last year, they are 60 per cent higher than they were in 2006, according to Confused.com/Towers Watson Car Insurance Price index.

The index also show that women are suffering a greater rise in costs than men.

A European equality law, which will come into force in December, will make it illegal to use gender as a criterion when calculating motor insurance costs.

Women have traditionally paid less than men because they are considered a lower risk group.

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