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Fraud 'hits car insurance prices'

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Car insurance premiums have been climbing at their fastest rate since 1994 due to the increased risk of fraud, a motoring group has claimed.

The April to June period this year saw prices jump by at least 11.5%, the largest rise since the AA started recording insurance trends 16 years ago.

AA Insurance research found that price comparison website policies saw an even bigger rise - 12.7%. Third party, fire and theft (TPFT) cover bought on these sites rose by 17.1%.

Comprehensive cover went up 11.5% to just under £704 in the last three months on the shoparound index, which is based on the average of the cheapest three quotes. TPFT rose by 15.9% to just under £964 on the same measurement.

AA president Edmund King said: "Last week's crime figures suggested crime levels were falling but crucially it missed a new 21st-century wave of fraud, such as providing false information and claiming for non-existent personal injuries, which just isn't being picked up."

© Press Association 2010