Car insurance drives 9% ahead

MOTORISTS with fully comprehensive insurance cover saw an average 9% increase in their premiums in 2001, according to the AA‘s quarterly British Insurance Premium Index.

Average car insurance costs were up 1.83% for the final quarter for comprehensive cover, while non-comprehensive policies rose by 1.5% in the quarter and 12.86% over the year.

So far the terrorist attacks of 11 September have not led to soaring insurance premiums. The annual increase for 2001 was down on the previous year – when premium prices rose by a staggering 19%.

'These changes show a real slowdown in the rate of increase seen previously, when the insurance industry was pulling itself out of loss,' said Andrew Briscoe, managing director of AA Insurance Services. 'During 2002 we expect to see continued increases of between 8% and 10% for car insurance, with rates starting to flatten towards the end of the year.'

However, he added that the full financial impact of the attacks on the US may not yet have been fully factored in. 'The market is still seeing claims costs increase, and events in the US on 11 September last year may yet have an impact on the cost of general insurance.'

Based on the AA‘s research, the average comprehensive car insurance policy costs £670 – but it could be £437 if drivers shop around for the best deal.

Home buildings and contents insurance premiums also rose in the final quarter of 2001 by 1.08% and 1.07% respectively.

Annual increases were by 3.86% (buildings) and 4.72% (contents) for the year. On average householders pay £137 for buildings cover and £110.52 for contents.

AA car insurance customers can now get a quote for adding new drivers to their policy and complete the transaction online at www.theAA.com. Further new facilities being introduced on the AA website over the next three months include: temporary change of driver - ideal for family or friends coming to visit for a few weeks - and change of address.