Car insurance rate news
15/01/2009
Policy premiums may rise 20 per cent this year
Insurance for car drivers is predicted to soar by up to 20 per cent in 2009 as insurers see fraud and personal injury costs continue to mount.
Based on these rocketing levels, average premiums for motorists with full no-claims bonus protection could rise from an average of £400 to £480.
But while some warn of such swingeing increases, leading UK broker AA Insurance forecasts a more modest rate of 10-11 per cent.
AA Insurance spokesman Ian Crowder said: "One thing that is certain is that the average premium will continue to rise, but by how much?"
Currently, insurers are finding they pay out about £105 for every £100 spent on premiums. The car insurance industry is understood to not have made an underwriting profit for some 20 years.
The costs of insurance fraud - where uninsured drivers cause accidents - is believed to account for £30 on each policy held by the country's 33 million motorists.
And a total of 430,000 whiplash injury claims made last year has generated a £1.9 billion compensation bill that adds around £66 to every driver's insurance quote and policy premium.
AA Insurance spokesman Mr Crowder said, "Some commentators suggest a rise of 20 per cent over the next year and certainly, a rise of that magnitude will be necessary if the insurance industry is to achieve an underwriting profit."
Another indication of the mounting costs of running cars has also been highlighted. Since the start of the AA Index in 1994, the price of comprehensive insurance for car drivers has more than doubled.
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