10 October 2007
Car insurance premiums are still going up, a new index from the AA has shown.
Its quarterly British Insurance Premium Index shows an overall rise of almost one per cent - and is the fifth report in a row in which premiums have risen overall.
An overall car insurance price rise of 4.4 per cent has also been recorded, year-on-year.
However, there was good news for market-savvy customers who shop around for the best insurance price for their vehicle: a special index for which the AA measured the cheapest three products across the providers for each risk group actually dropped in price by around half a percentage point.
John Close, Insurer Relations Director at the AA, commented that the rise was "in line with expectation".
He added: "Car insurance premiums have followed an upward trend since the second quarter of 2006 - the cost to the industry of personal injury claims and legal costs has been escalating rapidly, while accident damage costs has also risen faster than premiums."
The floods which hit central and southern England in June and July were also blamed by the AA for the rises in car insurance, with many vehicles caught up in rising waters and damaged.
Latest revised figures from the Association of British Insurers have shown that the floods could cause around £3 billion worth of pay outs for the industry as a whole.
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