Not more price rises! Yes, unfortunately further price rises are expected this year as car insurance companies argue that the high costs that they are facing have to be transferred to motorists, reports BBC Online. Insurance companies are facing higher costs from greater personal injury claims, such as whiplash, and more cases of fraud, which has forced them to increase premiums claims AA Insurance.

Simon Douglas the director of AA Insurance stated that the ‘underlying premiums are rising more steeply than they have since 2000 because of rising costs’, he doesn’t predict that this will ease, already last years prediction made by him has come into fruition as evidence shows that premiums have increased by 10%.

He concludes that companies in the industry needed to turn around underwriting losses and pay the costs of better detection of fraud and help clamp down on uninsured drivers, i.e. the main factors behind the greater costs.

They need to start soon as premiums are rising at a faster rate than at any time since the start of the decade. The average annual comprehensive car insurance policy rose to £778 between April and June, a rise of 3.5% compared to the previous three months, the year on year increase reached 11.3% in June.

Others hit include those taking out third party insurance policies, namely the young drivers, who already pay astronomical premiums due to the high-risk nature of these policies.

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