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Consumers suffer from spiralling insurance costs

Consumers suffer from spiralling insurance costs

Category: Car insurance

Updated: 26/11/2012
First Published: 28/01/2010

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 It is now over 6 months old so the content may be out of date.
Consumers are being hit hard by car insurance premiums, which registered their biggest ever quarterly increase during the last three months of 2009.

An index of British insurance premiums has found that the cost car insurance soared last year, rising by 18 per cent during the 12 months, including a seven per cent hike from October to December.

The marked increase in insurance costs has been partly blamed on rising fraud and litigation arising from traffic accidents.

"Many people seem willing to pursue claims for even minor injuries, such as mild whiplash pain that in the past they wouldn't have bothered claiming for," said Simon Douglas, director of AA personal insurance.

"This is encouraged by personal injury claims lawyers whose marketing urges people to make claims and whose costs, as well as compensation for the claim, are met by the third party insurer. This is becoming increasingly embedded in British culture and, ultimately, feeds back to premiums."

In a breakdown of quotes, the average comprehensive cover premium was found to have risen by 11.3 per cent to £613, while third party, fire and theft – as favoured by younger drivers – rose by 13.9 per cent to £788.

Research also found that the cost of housing insurance went up in the last quarter of 2009, with annual home buildings insurance policies rising by 5.9 per cent to £199, and contents premiums up by 6.4 per cent to £113.

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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 Any products featured may be withdrawn by their provider or changed at any time.

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