Insurance prices continued to rise towards the end of last year, with home cover prices finishing the year 11% higher and motor insurance prices up as much as 15% on the start of the year, according to the AA’s shoparound index.
The shoparound index is an average of the three cheapest quotes from a range of insurers, brokers and schemes. The main index, which is an average of all quotes, rose by around 0.6%.
According to the AA’s benchmark British Insurnace Index published today (19 January 2012), motor insurance rose by 5.4% in the last quarter alone last year. At the beginning of 2011 the average shoparound car insurance price was £842.69 but that rose to £921.38 by the end of the year.
Home insurance, while not as drastic as motor, saw steep increases as well. Over the last three months of last year building premiums rose 3.1% and contents premiums rose 4.4%.
While experts had predicted price rises for 2011, these figures were much higher than expected.
Simon Douglas, director of AA Insurance, said, “I expected a much smaller rise, especially following the small fall in premiums during the third quarter of 2011.”
According to Douglas these upward trends are expected to continue.
“The premium increases we have seen over 2011 reflect both past losses and concern about future claims.
“I expect that by this time next year, home premiums will have risen by somewhere between 5 per cent and 10 per cent” he added.
The figures support last week House of Commons report which blames rising personal injury claims for higher premiums. The AA released a similar report three years ago, warning that the rising cost and frequency of personal injury claims was putting pressure on premiums.
Mr Douglas said, “reform of the way that personal injury claims are managed can’t come soon enough. It is wrong that injury claims are rising while the number of accidents on Britain’s roads is falling.”
