•As the insurance industry shoulders a GBP1.9 billion fraudulent claim bill and investigators report a 44% increase in fake motor insurance claims, car insurance stealth charges are also on the up
•Compulsory excess payments have been increased by 32% in the last year from GBP129
to GBP170 – 85% of drivers would pay this charge in the event of an accident
•Drivers with a compulsory excess above GBP500 has increased almost tenfold from just 0.3% to 2.7% – 1.55% of these could pay between GBP1,000 to GBP3,000 to claim
•With over 4.4 million accidents resulting in a claim each year, this GBP41excess increase will make the insurance industry GBP154 million more in the next 12 months
•The number of drivers with a compulsory excess on their policy has jumped by 4% from 81% and currently impacts 21.5 million drivers
•On top of this, the average policy price has increased by 10% from GBP478.70 to GBP526.42 for fully comprehensive cover and almost 13% for third party
As the insurance industry foots a GBP1.9 billion fraud bill and recent reports reveal a 44% increase in false claims, new research from uSwitch.com shows that providers are strategically recouping this money from consumers by hiking compulsory excess charges by almost a third (32%) in the last year. In addition, the number of drivers being hit with a compulsory excess fee of between GBP1,000 and GBP3,000 has increased almost tenfold from just 0.3% to 2.7%. Across the country, this means that in the event of an accident, drivers will now have have to pay their insurer an average of GBP170, a fee which has gone up by GBP41 from GBP129 since August 2008.
With over one in five drivers (4.4 million) claiming on their car insurance each year, insurance providers will now be making an additional GBP154 million more from compulsory excess hikes in the next 12 months. This GBP170 compulsory excess charge combined with the average voluntary excess payment of GBP197 can make claiming for an accident a costly business. In fact, any damage that costs less than GBP367 to repair really isn’t worth making a claim.