January 28, 2010

Insurance rise shock

Car insurance costs rocketed by more than 18 per cent last year.

The jump in premiums was the biggest annual increase since costs began to be monitored in 1994.

According to the motoring organisation’s quarterly index, average premium quotes for comprehensive cover are now 18.7 per cent higher than in 2008.

And a study of the cheapest quotes show rates rose by more than 11 per cent last year.

Insurers have been struggling to overcome exhausted reserves while coping with sharp rises in settlement costs and the frequency of personal injury claims.

Insurance fraud is also costing the industry around £2 billion a year, which amounts to £44 on every household’s insurance budget.

One in every 20 vehicles on British roads are thought to be driven by uninsured drivers and claims involving them are estimated to add £30 to every annual motor insurance policy.

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