| Car insurance premiums up
Car insurance premiums have risen for
the second time in a row, the AA Insurance Premium Index reveals.
The average premium for comprehensive insurance
is up 1.41 per cent in the last three months, with premiums
for third party, fire, and theft insurance up 4.62 per cent.
"It has long been clear that the increasing
cost of meeting both accident damage and personal injury claims
would eventually have to be absorbed by increased premiums,"
said Kevin Sinclair, managing director of AA Insurance.
"The increase is long overdue. Premiums
have been kept artificially low by the entry of new insurers
seeking market share and the growth of internet sales, coupled
with underlying poor results hitting insurers' accounts.
"Some companies will still hold back
premiums for short-term gain but I expect other companies
to follow Norwich Union’s lead [and raise their premiums].
Two quarters’ rises may not be a trend but I believe
average quoted premiums will continue to go up."
And these rises are hitting young drivers
hardest.
"One in eight drivers is aged 25 and
under, yet account for a quarter of all road fatalities –
a shocking statistic of great concern to the industry,"
Mr Sinclair said.
"Young people, who are a large proportion
of the third party cover market, are paying the price and
suffering the brunt of recent premium increases.
"The average premium being paid is now
pence short of £1,000.
"Many companies don’t insure drivers
who are under 21 and it’s likely that others will review
their approach to young drivers."
The average fully-comp premium is now £772.13,
however this is still lower than the peak recorded in December
2003 of £777.57.
But while the average is up the ‘shoparound’
premium - an average of the lowest three premiums for each
risk quoted in the index - fell by 1.35 per cent to £458.81.
Average third party, fire and theft cover
is now £998.21, this is 21 per cent higher than two
years ago and double the level recorded since the index started
in 1994.
The ‘shoparound’ premium for
third party, fire, and theft is £534.26.
source: myFinances.co.uk (Last Updated: Friday, 9th October, 2006)
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