Money News
Hard-pressed car owners can expect to find the search for cheap insurance premiums more difficult as premiums resume their upward trend, following a brief respite over the previous quarter, according to the AA's quarterly British Insurance Premium Index.
The Index, which has been tracking industry-wide car insurance and home insurance premiums since 1994, shows that over the three months ending June 2008 more than £20 has been added to the average quoted premium for comprehensive car insurance, which now stands at over £700.
Young drivers, who typically buy third party, fire and theft insurance and already pay the highest car insurance premiums, are hardest hit because they are the most likely to make a claim. Since the last Index in March 2008, more than £45 has been piled on to the average premium they can expect to be quoted, which is now £884.
Simon Douglas, director of AA Insurance, says, "Car insurance costs are spiralling. While the number of casualties on Britain's roads is falling the cost of accidents is rising and young drivers are taking an increasing share of the toll. Insurers are also concerned about rising legal costs and personal injury claims and I expect the upward trend in premiums to continue.
"These findings are not good news for those with Third Party, Fire & Theft insurance, typically young drivers struggling to pay their first insurance premiums. But young men aged 21 or under are 10 times more likely to be killed or seriously injured on our roads than those aged 35 or over. The figures speak for themselves: the average insurance claim made by young drivers is nearly four times greater than claims made by drivers aged 30 or over."
One year on from last summer's floods, the AA's British Insurance Premium Index has also recorded a modest £1 (0.5%) rise in the average quoted premium for buildings insurance to £209.52, over the quarter ending 30 June 2008. Over the 12 months since July 2007, the average quoted premium rose by 4.3%. But the most dramatic change is a 22% annual rise in the Shoparound index (an average of the lowest three premiums for each risk quoted in the Index) for Buildings cover.
Since the floods, the average quoted Shoparound premium rose to £126.29 from £103.60 in July 2007. The average quoted premium for contents cover rose by just 12p over the same period to £128.69 while for combined buildings and contents policies, the premium rose 2.2 per cent to a few pence under £300.
Says Simon Douglas, "Although home insurance premiums are not rising quickly, it appears that the days of cheap home insurance deals may be numbered. I believe the sharp rise over the past year indicated by the Shoparound index for buildings cover suggests that those insurers offering the lowest premiums have revised their rates to take account of predictions of more frequent flash flooding events."
16 July 2008 © Moneyextra.com
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