The forecast comes from new research released by JP Morgan and the consulting firm Taylor Fry, which points to high claims payouts and stiff competition in the car insurance market last year, when premiums actually dropped about two percent as insurers chased new business.
Insurance companies have also not enjoyed robust returns on the investment front – another factor they're seeking to offset through higher premiums.
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Car insurance is a particularly interchangeable insurance product, since most features are similar – if not identical – from policy to policy.
All 50 insurers in our latest comprehensive car insurance reviews offer cover for accident, theft, fire, storm, flood, hail and vandalism, and provide at least $20 million of public liability cover. Most also offer a 24-hour helpline, lifetime repair guarantee (if you use an authorised repairer) and an agreed-value policy, meaning you decide how much to insure it for (with the exception of Bingle, who offer market value only).
That makes price the main thing to consider in most cases, and consumers would be wise to keep price front of mind and shop around before they renew their current policy.
No reward for loyalty
Over half of the insurers we surveyed in our most recent review admitted that premiums for a renewal could be higher than those for a new policy, while only 12 out of the 50 insurers offer a loyalty discount.
Home premiums also set to rise
The JP Morgan/Taylor Fry research also predicts a three percent increase in home insurance premiums in 2016 and makes a more troubling forecast for the decades to come. Over 300,000 households could see their home insurance premiums rise 48% by the year 2100, while 60,000 to 80,000 could see a 104% increase by the turn of the century.
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