Car insurance cost set to rise

Fri, 18 Apr 2008

Car insurance premiums are set to rise further, it has been claimed.

Andrew Strong, chief executive officer of AA insurance explained that, despite a slight fall in the cost of premiums in the first quarter of the year, the general trend for the price of car insurance is upwards.

He said: "A recent Datamonitor report suggested that the car insurance industry could become profitable by the end of 2009 - but we calculate that an annual premium increase of 20 per cent would be needed to achieve that."

Mr Strong added that while such sharp rises are unlikely, car insurance premiums will continue to increase as firms look to make their money back.

Regular, small increases will avoid the need for a dramatic hike in the cost of car insurance, he concluded.

Yesterday, Sean Gardener of MoneyExpert.com said that the rising cost of motoring means it is vital that people shop around for their car insurance.
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