Daily Insurance Industry News
 
 
Daily Insurance Industry News
Saturday 20th of January 2018
October 23, 2009

Car premiums rise at fastest rate in 15 years

by Gill Montia

Story link: Car premiums rise at fastest rate in 15 years

Car premiums rise at fastest rate in 15 years

The AA’s car insurance premium index shows average premiums increasing 14% in the past year.

In the last quarter alone, typical premiums surged 5.6%, rising at their fastest rate since the AA began keeping records 15 years ago.

Motorists who shop around can expect to pay £522 on average for fully-comprehensive cover, whereas those who fail to check out the competition can expect to be stung for £821.

Young drivers are worst affected, as premiums for third party, fire and theft policies rose by 9.3% over the quarter and 17.6% over the year, to an average £1,059.

According to the AA, motor insurers are struggling to remain profitable.

The group’s director of insurance, Simon Douglas, blames rising costs, depleted reserves and lower investment income (the latter as a result of the recession).

Both fraud and higher levels of personal injury claims also continue to put pressure on premiums.

Alarmingly, Mr Douglas estimates that across the car insurance sector, up to £110 is being paid in claims for every £100 taken in premiums.

The AA’s insurance premium index is based on 1,000 quotes from 90 different providers.

 

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