AA: Insurance premiums increase again

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AA: Insurance premiums increase again

Wed 16th Jul 2008

Car insurance premiums have resumed their increase after a brief respite, the AA's quarterly British Insurance Premium Index has found.

More than £20 has been added to the average premium quote for comprehensive insurance in the three months ending in June, according to the index.

The average cost of such insurance is now £700.

Young drivers suffer most, with more than £45 added to their cover since the last index in March.

Simon Douglas, director of AA Insurance, said he expected the increase to continue.

The index also found that home insurance has risen by £1 (0.5 per cent) in the same period.

But the Shoparound index (an average of the lowest three premiums for each area covered in the main index) shows buildings insurance has risen by 22 per cent since July 2007.

Price comparison website gocompare.com has urged consumers to "shop around" in the face of increasing home and car insurance.

A spokesperson said the rising cost of personal injury claims on car insurance and last year's floods left insurers with "no alternative" and that costs may need to rise further to restore profit to the industry.

But the spokesperson said not all insurers are increasing premiums.

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