Car insurance premiums saw an annual rise of 26.1%, according to figures released by the Office for National Statistics.
The cost of car insurance rose by 6.3% in April alone, adding a whopping 0.1% to the annual inflation rate. According to the Association of British Insurers, “spiralling” legal costs have been the key cause for rising insurance costs. Government figures show that, for personal injury claims under £10,000, on top of every £1 paid in compensation, a further 76p is added on in the form of legal costs. And for smaller claims, the tyranny of legal fees is even worse.
According to industry insider, such costs add somewhere in the region of 10% to premiums paid by motorist, a percentage which is considered to be exorbitant. The demographic group of 17 to 22-year-old females has been hit particularly hard by this trend, which saw its premiums rise by as much as 7% during the first three months of 2010. However, in something a silver lining for motorists, recent data from the Department for Transport indicate that the number of road traffic accidents has decreased.
Looking for the best deal car insurance? Compare the top car insurance providers in the UK