Car Insurance

Motor insurance premiums rise 14%

(GUARDIAN) - Car insurance costs are rising faster than at any time over the past 15 years, the AA said today, with average premiums up 14% since last October.

Drivers who are failing to shop around for insurance are facing typical premiums of £821 for fully-comprehensive cover, but even those using price comparison sites to keep costs low are paying on average £552, the AA said.

The motoring organisation’s insurance premium index, based on 1,000 quotes from 90 different providers, recorded its biggest single quarterly jump (5.6%) since it began collecting figures in 1994.

Young drivers appear to have borne the brunt of the rises. Premiums for third party, fire and theft policies, which are typically bought by young drivers as they are cheaper than comprehensive cover, rose by 9.3% over the quarter and 17.6% over the year to an average quoted premium of £1,059.

The AA blamed widespread unprofitability among car insurance companies for the rise in premiums. Last year a report by Datamonitor suggested premiums needed to rise by 20% if the industry was to remain profitable.

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