Motor insurance premiums have risen for the second quarter in a row, according to the latest AA British Insurance Premium Index.
The average quoted premium for third party, fire and theft rose by 4.62%, to £998.21. This compares with an increase of 1.24%, to £772.13, for comprehensive insurance.
“It has long been clear that the increasing cost of meeting both accident damage and personal injury claims would eventually have to be absorbed by increased premiums,” said Kevin Snclair, managing director of AA Insurance.
“The increase is long overdue. Premiums have been kept artificially low by the entry of new insurers seeking market share and the growth of Internet sales, coupled with underlying poor results hitting insurers' accounts.
“Some companies will still hold back premiums for short-term gain but I expect other companies to follow Norwich Union's lead. Two quarters' rises may not be a trend but I believe average quoted premiums will continue to go up”.
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