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Car Insurance premiums could be up 11%

Published: 29/04/2009 by Comments


There’s more bad news for motorists today, as the AA has warned we could see a dramatic rise in car insurance premiums. After recording an 11% increase in cover costs last year, the motoring company have predicted another climb throughout the remainder of 2009.

The AA also reported a rise in the first quarter - the first such increase in five years, with the annual comprehensive car insurance policies going up to £751.60 by the end of March 2009, a growth of 1.3%.

A rise in theft and fraudulent claims is being blamed for the sudden spike, as the recession hits home for many hard-up motorists. Recent research revealed that fraudulent insurance claims are costing companies an incredible £360 million, with motor insurance fraud top of the list.

The Director of AA Insurance, Simon Douglas, explained how the latest rise is bucking the usual trend.

“Premiums tend to fall a little during the first three months of the year. It’s when most car insurance renewals take place, while the new March car registration change prompts customers to look for new insurance cover, so competition between insurers tends to hold premiums in check. But the industry is facing escalating costs, falling investment income and underwriting losses. Premium rises are therefore inevitable.”


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