Car insurance premiums continue to rise

31 July 2009 / by Andy Davies

Car insurance premiums have risen by nearly four per cent in the last three months, according to AA Car Insurance.

From April to June 2009, the annual cost of comprehensive car insurance premiums increased by 3.5 per cent to £718, while over the past 12 months, comprehensive premiums have shot up by 11 per cent.

The survey of 96 car insurance providers also shows the average premium for third party, fire and theft  car insurance, which is typically bought by young and inexperienced drivers, has risen by 4.6 per cent over the last three months with the average premium now costing £968.

Simon Douglas, director of AA Car Insurance, attributed the rises to the increased costs the industry is facing, he said:

“There’s no getting away from the fact that the industry continues to suffer underwriting losses, which are predicted to be in excess of £240 million this year.

Mr Douglas believes insurance providers must do more to help young drivers, as many providers will not quote for drivers under the age of 21, whilst some have withdrawn their TPFT policies altogether.

He adds that fraudulent claims are not helping the situation as they add to the cost of premiums, while claims from drivers without any insurance is adding £30 to premiums for honest drivers.

However, Mr Douglas urged drivers who need insurance cover to choose a sensible premium, he added: “Customers are being tempted by cheaper quotes that offer lower levels of cover with high excesses so it is really important that they talk to their insurer to make sure that the cover meets their needs before they buy.”

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© Fair Investment Company Ltd

Written by Editorial Team