Car insurance cost rises 14.2%

The average cost of a comprehensive car insurance policy in the second quarter rose 14.2% from the previous quarter to £599, up 31% year-on-year, according to Business consultants EMB.

The heaviest brunt of the quarterly rise was borne by motorists aged 41-55 years, as they now have to pay to have their children added to their policies.

Women in this age group, who added a driver other than their husband to their policy, faced a 14% rise in the cost of their insurance cover, in addition to the 14.2% increase across the board.

According to EMB, the latest quarterly rise in car insurance policy was the result of double-digit price hikes executed by insurers in a bid to get back into profit, following increased claims costs, including higher personal injury payouts, and rising fraud.

Figures from the Financial Services Authority showed the average car insurer incurred costs of £122 for every £100 of premiums received last year.

The industry also had to pay out £400 million to the Motor Insurance Bureau in 2009 to cover the cost of accidents involving uninsured drivers, which added an average of £30 to other motorists' policy.

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