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Drivers face insurance premium hike

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Motorists have been warned that the sharp rise in the cost of car insurance premiums is likely to continue for the foreseeable future.

Drivers, who saw a 40% rise in the average cost of comprehensive motor insurance in the past year, are likely to face more double digit hikes, experts have warned.

Younger drivers saw a 51% rise in their car insurance costs during the past 12 months.

Rising fraud, higher personal injury costs, a rise in claims management firms and cost to the industry in dealing with uninsured drivers have forced insurance companies to push up prices, the Transport Select Committee was told.

Duncan Anderson, of EMB Consultancy, said the recent steep increases reflect a "catch up" in insurance premiums.

He said: "If claims continue to rise at the rate that they have been increasing, rates will continue to increase as well.

"Bodily injury claims are increasing at a rate of 30% and other claims types are increasing by 5% an annum.

"Overall there might be a 15% to 20% natural increase in claims costs if things continue as they are, which will be reflected in ever increasing premiums."

© Press Association 2010