Comprehensive insurance up 14.2%

In yet another blow for motorists, Confused.com and EMB have just reported that car insurance premiums have gone up by 14% in the second quarter of the year.

Insurers have had to raise the premiums in order to return to profit. EMB quoted the FSA (Financial Services Authority) figures showing that the average insurer incurred costs of £122 for every £100 it received in premiums in 2009.

The increased costs faced by insurers are mainly due to increased payouts for personal injury claims and a rise in the level of insurance fraud. Insurers also paid £400 million to the MIB (Motor Insurance Bureau) in 2009 for accidents that involved uninsured drivers, which added an extra £30 to every premium.

Of the total premium rises, comprehensive insurance saw the biggest rise, increasing by 14.2% on average during the three months to the end of June. The average you can now expect to pay is £599, an increase of £74.

When this is compared to the comprehensive premium in July 2009, this means in one year there has been a rise of 31%, costing motorists £142 extra.

The product director at Confused.com, Simon Lamble, said that it is a “massive blow” for motorists, especially as they are already suffering from higher petrol prices and insurance premium tax increases.

The worst price hikes were seen for drivers aged between 41 and 55, especially if they paid extra to have their children added to their policies.

Manchester and Merseyside were the worst areas for drivers in terms of insurance increases, witnessing the biggest quarterly increase of 18.2%.