Skip To The Main Content

Car insurance premiums rise by 40%

by  | 

The cost of car insurance has increased by a record 40% in the past 12 months, mainly due to high levels of personal injury and fraudulent claims, according to a study.

Statistics showed that average car insurance premiums shot up to £892 at the end of March - the biggest annual rise since the AA started the index in 1994. In the study, experts examined the three most competitive quotes available.

Worst hit according to the report are motorists in the 17-22 age group, who suffered a 64% year-on-year rise in the average cost of a comprehensive policy to £2,431, with young men facing premiums of £3,052.

The study blamed high levels of fraud and expensive personal injury claims for the sharp increase in car insurance premiums over the past year.

The group said despite the number of collisions on UK roads falling, the number of claims for whiplash injuries continued to rise, with more than 200 claims submitted a day, often for accidents that happened up to three years ago, when no mention of injuries was made at the time.

The biggest hike was to third party, fire and theft cover, policies that are often taken out by young drivers who cannot afford comprehensive cover, with premiums soaring by 82.1% to £1,533 as insurers continued to exit the sector, reducing competition.

© Press Association 2011