A report from the AA has indicated that that the price of car insurance has risen again. In the last three months, the average price paid by a consumer who shops around for their insurance has gone up by £50.
The AA also indicate that home insurance has now gone up by 5.6% in the last 12 months, partially due to weather conditions and an increase in burglaries.
The average price that a customer pays for car insurance after shopping around is now over £970. This figure has increased by 5.4% since October 2011 and is around 15% higher than 12 months ago. However, the costs varies around the country, with Scotland being the cheapest at around £590 per year and the North West of England being the most expensive, at over £1600 per year. This is followed by London and Yorkshire at just over £1100 per year.
The average quote for third party, fire and theft insurance is now nearly £1500 when shopping around. However, for drivers between the age of 17 and 22, the figure has risen by 6.6% to nearly £2500, suggesting that insurers are trusting young drivers even less than they used to.
Some insurers are now refusing to insure any young drivers at all.
Simon Douglas from the AA said: “The difference shows that the cheaper deals are disappearing. Young drivers seem to be the biggest losers with a higher than average increase for them. It’s clear that young drivers continue to be of concern to insurers, while many no longer offer cover to those under 21.”
The AA did indicate that the expect car insurance premiums to fall later this year.
The news follows recent claims by MPs on the Transport Committee that the dramatic rise in car insurance premiums was being driven by a surge in whiplash claims. The committee have suggested that whiplash claimants should now be required to justify their injuries with a higher standard of proof than is required at present. The committee have also argued that the ‘sharp practices’ employed by the car insurance industry should be stopped.
The process by which an insurer takes a referral fee for passing on details of a customer’s accident to a solicitors firm or a claims management firm has previously been criticised. The MPs on the Transport Committee suggest that this has been a big factor in driving up the number of insurance claims and in turn driving up the costs of insurance premiums.
Last year, the Office of Fair Trading began an investigation into the rising price of motor insurance, after it was noted that the price of insurance had risen dramatically in the last five years.
The AA also indicated that the changes in European rules will prevent insurers from taking gender into account when they set premiums from December 2012. They suggest that whilst this may reduce the average cost of insurance, women drivers will face the biggest increase in premiums.
A spokesperson from Gocompare.com said that more price hikes could be expected this year.