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Friday, June 21, 2024

Hendry Demands Answers to Skyrocketing Car Insurance Prices

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An SNP MP has written to the UK’s Chief Secretary to the Treasury, demanding answers as to why UK drivers are being forced to pay higher insurance fees than their European counterparts.

Drew Hendry MP, the SNP’s economy spokesperson, has challenged the Minister to explain what other factors have played a part in this rise, including Brexit, and what the UK government plan on doing to address the pricing disparity. 

It follows new analysis from the House Commons Library, commissioned by the SNP, which showed that since 2015, the UK has saw the average car insurance fee increase by 102.3%  – drastically higher than Sweden (+8.5%), Spain (+18.5%), France (+20.8%), Germany (+33.4%) and The Netherlands (+35.1%).

Meanwhile, Ireland (-21.1%), Belgium (-3.3%) and Denmark (-2.6%) have all saw insurance fees reduce in the same period.

Additional analysis from the Car Insurance Price Index also found 18-year-olds have have saw the biggest overall increase, with fees averaging £3,145 following a 70% annual increase. 

Mr Hendry has said “it is vital that the Financial Conduct Authority conducts an enquiry into these price disparities to ensure fairness and transparency in the insurance market”. 

In his letter to the UK’s Chief Secretary to the Treasury, Drew Hendry MP said:

“I am writing to you following our recent exchange in Parliament where I raised a concerning issue that affects many of our constituents: the rising costs of car insurance in the UK.

“As we have seen from recent data provided by the House of Commons library, insurance costs for UK drivers have doubled, whereas across the European Union, there has only been an 18% increase. Meanwhile, in Ireland, premiums are now a fifth cheaper than nine years ago. 

“The Association of British Insurers has suggested that energy inflation, the increased cost of materials, and the expenses related to second-hand and courtesy cars are driving this increase. However, these factors do not fully account for the significant disparity between the UK and the rest of Europe.

“The pressing question remains: why are UK drivers subjected to such exorbitant costs compared to our European neighbours? Is this a consequence of Brexit, or are there other factors at play? Moreover, what actions is the UK Government taking to address this glaring pricing disparity?

“As I highlighted in our exchange in parliament, this issue adds a considerable financial burden to UK drivers, especially to our younger drivers. Many are already struggling with the impacts of soaring household expenses and the economic challenges post-Brexit. The additional financial strain of high car insurance premiums is exacerbating existing inequalities and contributing to a tougher economic environment for the younger generation.

“Therefore, I urge your department to take immediate action on this matter. It is vital that the Financial Conduct Authority conducts an enquiry into these price disparities to ensure fairness and transparency in the insurance market. Additionally, given the geographical challenges in regions like the Highlands, where car travel is not just a convenience but a necessity, it becomes even more crucial to address these issues promptly.

“Thank you in advance for your prompt response and I hope to see swift and meaningful action taken to alleviate the financial burden on our constituents.

“Kind Regards, 

“Drew Hendry MP”

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