Comprehensive cover is nearly £150 more expensive than last year

The cost of car insurance has grown by 14.2% as insurers rise the price of premiums in a bid to return to profit, reports The Press Association.

The average price of a comprehensive motoring policy increased by over 14% in the second quarter of 2010, hitting £599. That equates to a £74 increase claims comparison website confused.com.

"This is a massive blow for motorists who have already suffered at the hands of petrol price hikes and insurance premium tax increases, and unfortunately we do not think we've seen the worst of it," said Simon Lamble, product director of confused.com and quoted by The Press Association.

He added: "In order to secure customers, insurers have been forced to repeatedly slash their margins, but inevitably this could not continue."

The figures show that a comprehensive policy costs 31% more than it did in July 2009. That's an increase of £142.

This might spark a rise in the number of people selling a car, as they trade in more costly models for cars which are cheaper to insure.

EMB were also behind the research. Partner Peter Lee was cited on Post Online as saying that there was a month-on-month increase of 6% in the cost for comprehensive cover. "Insurers' 2009 Financial Services Authority returns showed that the average private car insurer incurred costs of £122 for every £100 of premium received," he explained.

As reported by The Guardian last month, motorists were bracing themselves for a spike in the price of premiums after it was announced as part of the emergency budget that insurance premium tax would be more expensive.

 

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