October 22nd, 2009 
admin The recession has boosted the cost of car insurance. Comprehensive car insurance premiums have risen by 5.6% over the past three months, AA Insurance figures revealed today (October 22nd).
The latest quarterly increase, the sharpest since the AA began taking records over 15 years ago, also means that the average comprehensive car insurance deal costs 14% more than it did a year ago.
According to the car insurance provider, the impact of the recession is largely to blame for the sharp increase in customer premiums.
Providers’ investment income has been hit hard by the credit crunch, while the overall administrative cost burden faced by the firms has also increased.
Estimates from the AA suggest that car insurance firms are currently paying out £110 in claims for every £100 received in premiums.
“Despite motor insurance being one of the most competitive markets in the UK, insurers have little choice but to put premiums up,” said Simon Douglas, director of AA Insurance.
Separate quarterly figures from the AA also revealed that home insurance costs for consumers have increased.
The typical home buildings insurance premium was found to have risen by 1.6% over the last three months, while home contents insurance was up by 1.8%.
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