Car insurance premiums soar
January 16, 2007 by admin
Filed under News, News-Insurance
Car insurance premiums have reached their highest ever level, according to new research.
The AA British Insurance Premium Index found that in the last quarter of 2006 the average premium rocketed by 4.35 per cent.
That took the average cost of car insurance to a massive £806, breaking all previous records since the index began in 1994.
Drivers buying third party, fire and theft (TPFT) cover saw their premiums rise by a smaller amount, but they are still paying the most for their insurance.
According to the index, the average TPFT premium is £999.45. This is largely because a typical TPFT buyer is young, meaning higher premiums and little no-claims bonus.
“Young drivers account for a quarter of all road fatalities and are five times more likely to have an accident than a driver aged 35-plus,” said Kevin Sinclair, managing director of AA Insurance.
“Premiums reflect this shocking record while many insurers will no longer cover young drivers.”
The Index also looked at home insurance premiums and found little change. However, some analysts believe that with an increasing number of freak weather incidents in the UK, we could soon see premiums rising.
“The recent north London tornado is an example and meteorologists are predicting more of the same,” commented Mr Sinclair.
“Insurers are taking note but it will take several such events to have a significant upward influence on premiums. However, I do believe that this year will start to see an upward trend.”
