Record rise for car insurance rates

Car insurance premiums are on the increase thanks to accident-prone young drivers and a rise in fraudulent claims, according to the AA.

Its British Insurance Premium Index revealed that motorists were slapped with an 11.5% rise in the third quarter, based on the three cheapestcar insurance quotes collected in its survey.

The cost of annual comprehensive cover rose by 39.3% to £792 from the start of the year until the end of September - the biggest annual rise recorded by the Index since it was created in 1994.

Meanwhile, the average cost of third party, fire and theft policies - the type of cover favoured by young drivers - rose by 54.6% to £1,097.

It is believed that young drivers have been hit hardest because car insurance providers believe they are more likely to make a claim against their policies, compared with more experienced drivers.

Over the past year, the average cost of cover has jumped by 51% for people aged between 17 and 22. Inexperienced male drivers can expect to pay approximately £2,500 in car insurance premiums a year, while women typically pay £1,400.

Copyright © Press Association 2010