AA say car insurance premiums will climb

Wed, 10 Oct 2007

The AA have released their latest British Insurance Premium Index, and reveal that both home insurance and car insurance premiums are likely to increase in the coming months. The reasons behind the increases are largely down to high levels of insurance claims due to flooding in the UK.

Car insurance costs, despite recent claims in the media, have been climbing steadily for some time. The report indicates that premium costs show no signs of slowing down. Home insurance premiums were also found to be climbing. The insurance industry faced a reported £3 billion bill caused by flooding this summer.

The director of Insurer Relations at AA insurance, John Close, reportedly commented: "We now see the result of that devastation reflected in premiums as insurers meet the cost of drying out and repairing homes as well as temporary re-housing of families while their homes were made habitable once again. Some predictions that premiums would rise by 15 per cent were overly pessimistic and, although I believe premiums will continue to rise as insurers dip into their reserves, I expect competitive pressure will keep increases affordable. One positive outcome seems to be that those who had no contents insurance are thinking again, with many insurers reporting increasing business."
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