Fraud fuels fastest-ever increase in car insurance costs, says AA
Fraudulent claims have been blamed for fuelling the fastest-ever rise in car insurance premiums.
Monday, 19, Jul 2010 01:59
Fraudulent claims are causing car insurance premiums to climb at the fastest pace on record, according to the AA.
The motoring body said that in the three months to June 30th, the average cost of a comprehensive policy rose by 11.5 per cent to £704 a year.
This is the fastest rate of inflation for direct cover since the AA started tracking premium trends 16 years ago.
For policies purchased through price comparison sites, the increase was even sharper at 12.7 per cent, the organisation noted.
Premiums for third party fire and theft cover, which is popular with young motorists, rose by 15.9 per cent for direct deals and 17.1 per cent for comparison sites.
AA president Edmund King said a "wave of fraud" that has seen some individuals submit false information or claim for non-existent personal injuries is one of the major factors driving premiums higher.
"Last year, the cost of meeting claims exceeded premium income by 22 per cent and the spiralling increases we're seeing show that insurers are trying to fill that chasm," he commented.
In April, Sainsbury's Finance said the annual overall cost of motoring was £2,539, up 20 per cent since 2007.