Car insurance cost on the rise, figures show

Tue, 21 Oct 2008

The average cost of a car insurance premium increased by £22 over the last quarter, new figures show.

The AA's British Insurance Premium Index also reveals that quoted car insurance premiums now stand at an average of £724.28, an increase of 7.6 per cent over the course of the last 12 months.

According to the firm's Shoparound Index - which is aimed at reflecting the cost of car insurance for those who try and find the best deal - the average premium now stands at £486, an 8.7 per cent rise on this time in 2007.

Simon Douglas, director of AA Insurance, said: "Despite these rises the car insurance industry continues to make an underwriting loss: for every £100 taken in premiums, more than £105 is paid in claims ."

Car insurance firms are increasingly concerned about the growing cost of legal and personal injury claims, he added.

Yesterday, the Financial Times reported that halal car insurance firm Principle is looking to take on its rivals in terms of price as well as offering a product which is acceptable to Muslims.
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