It is now a tradition to expect your bills to keep rising by the day. And this could continue for as long as the credit crunch survives. But even in the midst of the crisis people still hope and sincerely wish their car insurance premiums do not rise at all. Every little increase, as it were, brings with it additional worries.

But car insurance premiums will continue their upward journey to the sky, perhaps, if recent warnings by insurance experts are anything to go by.

Earlier in the year we had a number of experts suggesting that car insurance premiums would not remain stable since costs were rising and that any attempt to keep them constant would result in insurers running out of business. The argument then made much sense, and still makes a lot of sense now, given that insurers are in business not only to survive but to also make profit. If all they do is pay out on claims and make no profit at all, they would hardly be able to survive, let alone make any profit. This logic, as simplistic as it looks, could be open to a number of interpretations and views.

Some factors that could lead to increases in car insurance premiums

Earlier in the year, in spite of the usual concession women enjoy in terms of car insurance, it hit news headlines that female drivers unlike their male counterparts were using their cars as a second wardrobe to keep items that ordinarily should have been kept at home. This, insurers feared, could result in cars becoming targets to burglars because they offered irresistible invites to thieves. And such items could also become in-car missiles in the event of accidents, worsening the situation and increasing the likelihood of claims.

Although the above observation did not result in the good impression insurers have of women drivers being altered, it, nonetheless, led to the suggestion that people who continue to imbibe such habit would need comprehensive car insurance to enjoy enough coverage. Thus, while women enjoy cheaper premiums some may have to pay more to keep up certain habits, like the one above.

The ‘uninsured drivers’ factor is a very worrying one. In the UK researches after researches have revealed the real menace of uninsured drivers. A recent study by Motor Insurers’ Bureau found that they add at least £30 a year to the premiums of insured drivers. But the good thing is their number is progressively declining and honest drivers may begin to have a sigh of relief. This is further confirmed by the Association of British Insurers (ABI) that: “More is now being done than ever before to catch motorists who do not have car insurance.”

Another worrying trend is the sharp rise in the number of people with comprehensive car insurance making claims for whiplash as warned by AA insurance. This could also shoot up the cost of car insurance premiums.

Whiplash claims, as suggested by recent statistics jointly released by the insurer and the Association of British Insurers, jumped by 25 per cent in the last five years. With the cost of shoparound car insurance premium rising by 8.7 per cent, claims on whiplash play a huge role in contributing to this.

The problem with these rises is that as insurers incur more costs they pass them on to customers, especially new policyholders. But people could still save on their premiums even in the face of increasing premiums by shopping around.