Car insurance premiums to rise - againMotor insurance premiums hiked up by 40%

10 November 2010

Person using a computer

Shop around for the best deals on car insurance

The Transport Select Committee has head that car insurance premiums have rocketed by 40% in the last year, with younger drivers bearing the brunt of premium increases.

A combination of increased fraud, higher personal injury costs, the rising popularity of claims management companies and the impact of claims involving uninsured drivers are all to blame for the ratcheting up of motor insurance premiums

Young drivers pay more

Younger drivers are being most acutely affected, with the average comprehensive insurance premium rising by 51%. Duncan Anderson of insurance specialists EMB Consultancy said: 'If claims continue to rise at the rate they have been increasing, rates will continue to increase as well. Bodily injury claims are increasing at a rate of 30% and other claims types are increasing by 5% an annum. Overall there might be a 15% to 20% natural increase in claims costs if things continue as they are, which will be reflected in ever-increasing premiums.'

Younger drivers typically pay insurance premiums of between £2,000 and £3,000, which is often far more than the value of their car. 

Research the best car insurance deals

Which? insurance expert Dan Moore said: 'Car insurance is a must for drivers, but the rate premiums are increasing by is likely to create serious problems for motorists. It makes it more important than ever for consumers to devote a little time in the run-up to their renewal date to look around for the best deals. The sums involved more than warrant this attention.'

See the Which? Car insurance advice guide for more on how to buy a motor insurance policy. 

pound coins

Which? Money when you need it

You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.

Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.

Or for money-saving tips, and news of how what's going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast

For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.