Drivers out in cold with cost of insurance to rise further

THE cost of car insurance could increase further as the freezing weather sweeping Scotland brings a sharp rise in claims.

Insurers have reported an increase in claims from customers affected by the snow and ice, with motorists seeking to cover the cost of collisions caused by dangerous driving conditions.

Experts have warned that unless there is an improvement in conditions soon, insurers – still absorbing the impact of insurance claims made in the wake of November's floods – may have little choice than to hike premiums to recoup the cost of unusually high pay-out levels.

Car insurance premiums are already rising at their fastest rate since 2003, according to Deloitte's Motor Premium Index, with comprehensive car insurance up 11 per cent last year alone.

Insurer Swiftcover has seen car insurance claims rise by an "unprecedented" 75 per cent since the turn of the year, compared with the usual 21 per cent winter increase. And a spokesman for the AA said claims were currently running at over 30 per cent above the normal level for this time of year, with a third of all motor insurance claims related to snow and ice. Motorists who have been forced to abandon their cars and returned to find them damaged by collisions or broken into account for a significant proportion of claims, he said.

Steve Sweeney, head of car insurance at moneysupermarket.com, said that with insurers allowing for heightened claim volumes in the winter months, it was not inevitable that the current conditions would have increase the cost of insurance.

"However, if these current freezing conditions continue for a prolonged period, and claims increase further, we could potentially see an impact on insurance premiums."

Mark Monteiro, insurance expert at uSwitch.com, said the effects of damage caused to roads by the current weather could push premiums up further.

"This will do nothing to halt spiralling cost of premiums, which are rising at their fastest rate for ten years. With the average repair cost for pothole damage amounting to 240 and some bills as high as 2,710, it is vital that drivers are increasingly vigilant on the roads and take the necessary precautions to avoid being left out in the cold financially, long after the snow has subsided."

Adam Cracknell, spokesman for Aviva, said the insurer had experienced a 30 per cent rise in motor insurance claims since the cold snap began last month.

But he claimed that premiums would not be affected as a consequence. "Most of them are minor accidents that don't have huge repair costs and the cost per claim is nothing to be concerned about, so they should not have a huge impact on premiums," Cracknell said.

The freeze will also push household energy bills up by an average of 60 if it lasts for two months or more, uSwitch claimed. It said the typical 3 a day cost of heating a home could rise by 1 a day as more gas and electricity is used to heat homes.