Car insurance premiums are rising rapidly, according to the latest AA British Insurance Premium Index.
The index reveals that the average comprehensive premium jumped by 4.35% in the last quarter of 2006 to almost £806, the highest ever level.
And there was also a slight rise in the average third party, fire and theft premium, to nearly £1,000.
This contrasts sharply with home insurance premiums, which increased by only 1.26%, to £209, and contents cover, which fell by half of 1%, to less than £148.
The average car insurance premium has now almost doubled over the past decade. Kevin Sinclair, managing director of AA Insurance, said: “Since then, competitive activity led to a falling trend despite the fast rising cost of both accident damage and personal injury claims.”
“Other insurers are now following Norwich Union's lead and have increased premiums to more realistic levels given that the cost of claims is rising at about 6% per annum – and this is reflected in the Index.
“Over the past three quarters, premiums have risen by nearly 6% and I believe this trend will continue.”
Sinclair added that third party, fire and theft insurance premiums are also likely to continue their upward trend. “Young drivers account for a quarter of all road fatalities and are five times more likely to have an accident than a driver aged 35-plus. Premiums reflect this shocking record while many insurers will no longer cover young drivers.”
