AA
Motor insurance has risen at it’s fastest pace in 15 years according to a report from the AA, with the rising cost of personal injury claims and insurance fraud having a major effect on the premiums that we pay.
The average premium quoted for comprehensive motor insurance rose by 5.6% in the last quarter up to September 2009 and has increased by 14% overall in the last twelve months.
The scary part is that insurance companies are still selling motor insurance as a loss leader, hoping to encourage motorists to buy other more profitable insurance products. The industry currently pays out £110 for every £100 taken in premiums and AA Director of Insurance Simon Douglas says that at current levels a rise of 20% would be needed to return the industry to profitability.
The compensation culture that has crossed the Atlantic to the UK in recent years is proving to be a massive burden on motorists in particular as anyone involved in an accident these days is urged to seek a pay out for personal injury, with many companies willing to take up the case on a no win no fee basis.
Personal injury claims reached £9.6bn last year while insurance fraud cost the industry £1.9bn.
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