The cost of
car insurance has risen significantly over the past three months, new figures have indicated.
According to a study carried out by motoring organiation AA, the average cost of comprehensive cover has jumped from £538 to £704 in the past year – a 30 per cent increase.
Furthermore, the cost of such policies has risen by 11.5 per cent during the last three months alone, which has been attributed to the high prevalence of insurance fraud and the overall value of claims being made.
AA Insurance director Simon Douglas said spiraling costs for insurers could mean that their prices are pushed higher still in the coming months.
"Since January last year average quoted premiums have risen by over 30 per cent, and I won't be surprised if, by the end of 2010, we'll have witnessed an unprecedented 50 per cent rise in just two years," he said.
Currently, many insurers are paying out more than they receive from insurance policy sales, resulting in price hikes for motorists.
Recent figures from insurance analysts EMB revealed that the industry is paying out £1.20 in costs and claims for every £1 it receives.
