Index reveals rise in car insurance premiums

Mon, 15 Nov 2010

In the space of just 12 months, fraud and surging personal injury claims have pushed the price of car insurance nearly 40 per cent higher.

Indeed, the latest AA British insurance Premium Index claimed that the cost of an annual comprehensive car insurance policy increased by the biggest margin on record.

Further to this, the index found that for younger drivers, aged between 17 and 22, prices increased by a 51 per cent.

As a result, men of this age can now expect to pay an annual premium of around £2,500 and women £1,400.

However, this rise comes against the backdrop of a fall in recorded accidents .

"Recent years have seen intense competition encouraged by the growth of price comparison sites, which had kept premiums artificially low to the point that many insurance companies were making large losses on car insurance business," commented Simon Douglas, director of AA Insurance .

This comes after Will Thomas, head of motor at Confused.com, urged the government to work with insurance providers, regulatory bodies and associations in an effort to halt the steep rises in car insurance premiums .
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