Following two successive of rises in car insurance premiums, in which an increase of 12% was calculated between 2009 and 2010 and a jump of 9% reported over just 9 months of this year believed to be linked to replacement car costs, the OFT have announced they plan to look into the rising cost of cover.

In recent years the OFT identified personal injury claims as one of the main causes for huge hikes in the cost of insurance, however more recently the regulatory body has highlighted credit hire replacement cars and third party vehicle repairs as two areas which it believes may be having an impact on the rising cost of car insurance premiums.

The credit hire companies offer a replacement car to the drive that was not at fault in the accident to use while their car is being repaired. This is being offered to the driver, regardless of whether they had a replacement car feature on their policy or not as the cost of the hire car is then passed onto the insurance company of the driver at blame, driving up the cost of a claim further. The impact of these more costly claims is then being felt by motorists in the form of more expensive premiums.

The OFT is continuing to probe this issue and will have concluded its enquiry by early next year.

INGENIE is masterminded by three individuals namely the ex footballer and sports pundit Gary Lineker, former MD of RSA Insurance Group, Steve Broughton and the Chairman of British Airways, Sir Martin Broughton.

The innovative new car insurance company was set up with the intention of providing affordable insurance options for young drivers who the company directors feel are often priced off the road. With some youngsters being issued with quotes for over £2,500 for annual cover, it’s not surprising that many are being left unable to afford to get on the road at all, and so that’s where INGENIE hope to help.

While the vast majority of other car insurance providers employ a technique known as collective risk assumption to calculate insurance premiums which often leads to all young drivers getting tarred with the same brush and being branded high risk and hit with an unaffordable insurance premium, INGENIE are proposing to utilise the very latest telematics technology in order to create a true picture of each drivers’ ability on the road.

Through the data collected from the technology, INGENIE will tailor a car insurance policy to that individual driver and so the safe and sensible drivers will be rewarded with lower premiums, while those who are found to less careful behind the wheel will be quoted a higher priced premium to reflect their riskier behaviour on the road.

INGENIE plan to market their product to the young drivers through social media such as Facebook, Twitter and YouTube.

The black box is the same size as a smart phone and is installed in the car to analyse the driver’s style, skill, habits, and time of day they are driving in order to personalise the motorist’s premium.

Those who display careful and non risk taking driving styles will more likely than not, to benefit from a lower rate of cover. For that reason, insurers are offering the technology to first time and younger drivers in a bid to help reduce the often unaffordable high rate of cover for these motorists.

More and more insurers are now offering black box systems as the price of this type of technology has fallen. Those drivers who have taken out a policy using telematics to monitor their driving habits have noted a 22% reduction in the cost of their annual premium, which equates to as much as £800 in selected cases. So if your car insurance is due for renewal, it’s worth investigating whether this type of cover could be beneficial for you as the savings can be substantial.

Year on year annual car insurance premiums have been rising at a rate of as much a 40% every 12 months. The Office of Fair Trading (OFT) has revealed plans to investigate car insurance in the UK with this in mind, and will reveal their findings in December. If they find the industry has been operating in a non competitive way, further action will be taken by the official body.

The most interesting development on late is the government’s plans to tackle referral costs which it feels is having a direct effect on the rising cost of car insurance. Often motorists who have been involved in an accident are encouraged to make a claim on a “no win no fee” basis. The claim is then passed between a management company, insurance company and lawyer who charge each other for the claim referral, with the lawyers recovering their costs from the losing defendant. The upshot being that honest motorists are being hit with higher premiums to cover the cost of the high number of personal injury claims being made.

If the government is successful in their bid to put a stop to “no win no fee” claims, this is likely to lead to a decrease in the number of personal injury claims being made, helping to put an end to the compensation culture and the year on year increases in the cost of car insurance.

The online petition has been launched by the MP for Bradford East, David Ward, whose constituency sees some the highest car insurance rates in the country. The issue of rising car insurance costs isn’t just isolated to young drivers either as the MP has described instances in which drivers with a 30 year driving history with no claims have struggled to find affordable cover simply because of where they live.

David Ward has described being inundated with complaints from his constituents over the spiralling cost of car insurance in the Bradford area. A rise in the number of fraudulent claims and crash for cash scams in this area of Yorkshire has been blamed for the increase in the cost of cover for responsible drivers.

For MP David Ward, something had to be done, and so the online petition has been established. So far the petition protesting over inflated car insurance quotes has gathered over 150 signatures. The MP plans to present the petition to the Department of Transport and is also considering raising the issue in the House of Commons.

18-year-old Chris Berry used a price comparison insurance website to request quotes for cover across a range of insurance companies and the cheapest quote he received came in at just shy of £5,000 however this was for the most basic level of insurance, third party, fire and theft. The same insurer then gave him a quote of £17,800 when he requested a quote for fully comprehensive cover, more than tripling the original quote for basic cover.

The youngster said he was astonished when you received the costly quote, saying he wasn’t asking to insure a Ferrari, merely a 1997 registration 1 litre Volkswagen Polo, a typical first car.

The extortionate rates of car insurance for young drivers have been the subject of discussion for some time. The fact is, with insurance quotes for an annual policy coming in at thousands of thousands of pounds, this is stopping many young drivers from getting behind the wheel. Chris Berry believes something needs to be done, and has even emailed the Prime Minister, David Cameron, with regards to the issue.

Insurance companies say that although the cost of car insurance for young drivers has risen, they say that the cost of cover has increased for all drivers because of increases in fraud and other factors affecting insurance quotes.

Currently, women enjoy cheaper rates than male drivers on car insurance as statistics show that they are less likely to be involved in an accident, and even when female drivers are involved in a crash, their claims are lower.

However the European Court of Justice this week ruled that using gender as a means by which to calculate risk by insurance companies was tantamount to discrimination, and so from December 2012, gender will no longer be taken into consideration when calculating car insurance premiums.

The upshot of this is that women can expect higher rates of car insurance, while male drivers are likely to see a reduction. However a recent report found that the vast majority, 78%, of those women questioned thought the ruling was unfair. Only 22% of respondents thought the ECJ ruling was just.

Not surprisingly, the poll found that male drivers were happy with the ruling, with 74% declaring that they agreed with the decision from the court in Luxemburg that gender bias is discriminatory and that they welcome the change in the rules.

Typically, young male drivers are hit by the highest car insurance premiums as they are deemed riskier to insure. However if the ruling from the European Court of Justice goes ahead as planned, it would make it unlawful for insurers to calculate premiums based on gender.

Up until now, insurers were able to justify charging young male drivers more for their cover as there is strong statistical evidence to suggest that young men pose more of a risk to insurers compared to young females. Males aged 17-22 years are twice as likely to make a claim on their cover compared to their female counterparts, while young men are 10 times more likely to be involved in a serious accident.

Despite this evidence, if the European Court Rules that calculating insurance premiums based on gender is discriminative, women could be about to see their annual car insurance premiums rise by as much as £1,000 a year, while young male drivers may note a slight decrease in the cost of their cover.

Being caught driving over the speed limit or performing a hazardous road manoeuvre is not only dangerous to other road users, but the implications mean you will be categorised as a risky driver by insurance companies, and hence your car insurance premium will go up.

This is bad news for any driver, but for younger drivers who are already facing hefty car insurance rates, the addition of points to their licence could mean they are priced out of the market and unable to afford insurance.

The advice being given to drivers by car insurance experts is to consider the implications of putting their foot down while behind the wheel as being caught driving over the speed limit does have costly repercussions.

Recent statistics have shown that car insurance premiums rose by 27% on average after a driver had points added to their licence as a result of speeding or another dangerous driving manoeuvre.

The number of people using price comparison websites to track down cheaper car insurance jumped by a massive 53% says confused.com, following the broadcast of a TV Watchdog programme on car insurance.

The youngest drivers in the UK, those aged between 17-22 years, have been subjected to the biggest rises in car insurance rates with male drivers receiving the highest costs.

The average cost of car insurance for a young male driver now stands at over £2,000 which is almost double the cost of cover for a female driver of the same age. Statistically young male motorists are twice as likely to be involved in an accident compared to a new female drivers, which is why insurers hit male drivers with higher costs as they pose a much greater risk than their female counterpart.

In some cases, insurance companies have pulled out of the young driver market all together, and are no longer offering car insurance for drivers under a certain age as they believe the risk is too high.

Insurance experts believe the cost of cover for UK motorists has also been pushed up by the increase in claims made for personal injury by people involved in car accidents. If an individual is seriously hurt, or disabled by an accident, the claim could be for as much as £15 million.

Given the huge rises in the cost of car insurance, many young drivers are being priced out of the market and are no longer able to run a car.

The recent increase in car insurance premiums is the highest seen in the last 16 years.