Car insurance Updated:
Car insurance premiums rose in the first quarter of 2009, figures have revealed.According to the AA, the average cost of a quoted policy was up 1.3 per cent - having fallen in the first three-month period in each of the previous five years.Simon Douglas, director of AA Insurance, explained that the time is traditionally one when providers face competition, as the March car registration means customers shop around.However, he noted that predictions of insurers attempting to recoup losses have proven to be correct, stating: "The industry is facing escalating costs, falling investment income and underwriting losses. Premium rises are therefore inevitable."Mr Douglas went on to say that around £105 is paid out in claims for every £100 received through car insurance premiums and that the economic downturn has meant reduced investment income.Last week, the AA welcomed a government initiative that will see car insurance customers who trade in a vehicle more than ten years old provided with £2,000 towards the cost of new one.
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