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Car insurance premiums rise steeply

Car insurance premiums rise steeply

Category: Car insurance

Updated: 26/11/2012
First Published: 30/07/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

UK consumers are being hit by the fastest rises in car insurance premiums for almost a decade, with prices increasing by over one per cent a month during May, June and July.

The findings are part of the AA's British Insurance Premium Index, which has revealed that the average quoted premium for an annual comprehensive car insurance policy increased by 3.5 per cent.

The rise means car owners can expect to pay an average price of £778.13 for a year's cover, while the latest increase means that premiums have soared by 11 per cent in the 12 months to June.

There have been reports recently that premiums are static, but these are misleading, said Simon Douglas, director of AA Insurance, who pointed out that uninsured drivers are costing the industry millions. "The fact remains that underlying premiums are rising more steeply than they have since 2000 because of rising costs.

"There's no getting away from the fact that that the industry continues to suffer underwriting losses, which are predicted to be in excess of £240 million this year," he said.

"Customers are being tempted by cheaper quotes that offer lower levels of cover with high excesses, so it is really important that they talk to their insurer to make sure the cover meets their needs before they buy."

Similarly, the price of buildings insurance premiums continues to rise, with the average price standing at £223.92 for an annual policy. The hike of 2.5 per cent between April and June means policies have increased for six consecutive quarters.

However, there is one ray of light for consumers, as the average price of home contents insurance fell by 3.2 per cent over the last quarter to £122.32 – the cheapest level since 2001.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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