Not more price rises! Yes, unfortunately further price rises are expected this year as car insurance companies argue that the high costs they are facing have to be transferred to motorists, reports BBC Online. Insurance companies are facing higher costs from more 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’, and he doesn’t predict that this will ease. Already, last year’s prediction made by him has come to fruition, as 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, as well as help clamp down on uninsured drivers, and that these were the main factors behind the greater costs.

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, while the year on year increase reached 11.3% in June.

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

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