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Car insurance : fraud is responsible for rise in premiums

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According to the Automobile Association insurance fraud is a major contributor to a 31% increase in car insurance premiums, over the past 12 months. For the motoring association, the typical cost of fully comprehensive cover currently stands at £704 (€844), premiums having risen at their fastest rate in 16 years of records. Furthermore, premiums for younger drivers are rising at an above average rate, with those aged under 30 having to accommodate an 11.5% hike the past quarter alone.

AA Insurance director, Simon Douglas, comments: “While the organised ‘cash for crash’ scams that ripped millions of pounds off insurers have made headlines, the problem of car insurance fraud is much deeper and has become one of the principal drivers of insurance premium inflation.”

Last week, Co-operative Insurance suggested that the UK’s honest motorists pay £1.25 billion a year to support the activities of dishonest drivers. According to research from the insurer, the average car insurance premium carries a £50 penalty to cover costs incurred by uninsured and fraudulent road users.