Monday, 18 April 2011

Insurance premiums up 33.2%

  • Average cost of car insurance in the UK up by 33.2%
  • Motorists feel the pinch as fuel duty and VAT rises take hold
  • Average premium for 17-22-year-olds is £2,251
The average cost of private car insurance in the UK rose by 33.2% in 2010.
According to figures released by the AA, car insurance now costs an average of £843, up £210 since last year.
The fourth quarter of 2010 saw a 6.4% growth in the average premium, equating to an average of £51 per policy.
As identified in Parkers' insurance investigation, more and more companies are either stopping third party fire and theft cover altogether or loading it with extra cost, making fully comprehensive cover the cheaper option.
Simon Douglas, Director of AA Insurance, said: 'There has been no let-up in premium increases as insurers struggle against losses from 2009 when for every £100 taken for premiums £123 is being paid out in claims."
Young drivers are - somewhat predictably - feeling the pinch the hardest. Seventeen to 22-year-olds have seen a massive 58.3% rise in premium, the average now a massive £2,251.
The figures represent the biggest increase in premiums since AA records began back in 1994, and have sparked a House of Commons Transport Committee inquiry into car insurance prices in the UK.
As a result, from April 2011 insurance companies will have direct access to the DVLA database to use as part of the insurance application process. Continuous insurance enforcement will also come into effect, meaning if a car isn't declared off the road it must, by law, be insured or the owner will be committing an offence.

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