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Car insurance : premiums and fees rise

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It appears there is no light at the end of the tunnel for motorists after another record rise in car insurance premiums.

The AA British Insurance Premium Index indicates that there has been a record rise of 11.5 per cent over the past three months, meaning that over 12 months the cost of an annual comprehensive car insurance premium has shot up by 39 per cent – or £792. Young drivers are being hit particularly hard with the average cost of insurance jumping by 51 per cent for those aged between 17 and 22.

Customers are being warned to watch out for extra charges with insurers worried about parents fronting policies for their children; regularly charging administration fees for amending policies; and cancellation fees. The additional charges have been described by Which? Magazine as “exorbitant” but are deemed necessary by insurers who are losing money due to claims inflation.

A spokesman from AA Insurance, Ian Crowder, commented that the cost of repairing cars has been rising and at the same time the number and value of personal injury claims has increased. This means motorists are facing increasing premiums when the rest of their household budgets are also being squeezed.

Source : Contract Hire and Leasing