Drivers are paying almost £82 more for car insurance than a year ago and are likely to see premiums rise further, according to the latest figures from the Automobile Association (AA).
The average annual cost of a new policy rose to £586 in the three months to the end of September, a 16.3% increase on the same period in 2015, the motoring group said.
The AA said premiums were driven up by continuing problems with whiplash claims and consumers’ growing tendency to shop around for a new policy each year.
Its index of premiums compares the cost of the five cheapest policies for a range of different drivers. Insurers were becoming less inclined to offer low introductory rates to attract new customers, the AA said.
Other reports have suggested that the cost of motor cover has been pushed up by advances in technology.
Additions to cars such as parking sensors on bumpers have increased the cost of repairs after accidents. In September, insurer LV= warned that it may have to increase premiums after the cost of accident payouts rose.
Michael Lloyd, AA’s director of insurance, said: “We are witnessing sustained price increases once again, which is bad news for drivers. I can’t see an immediate end to the current upward trend.”
The AA index showed that the cost of cover rose most steeply for 60 to 69-year-old drivers, with best-buy policies up by 5.4% in the third quarter to an average of £366. However, their premiums remained lower than other age groups.
Younger drivers continued to pay far in excess of other motorists, with the cheapest policies averaging £1,287, an increase of 3.6% since spring this year.
Motorists in Northern Ireland had the highest premiums, with those who shopped around for a quote paying an average of £862. By contrast, average premiums cost £422 a year in Scotland.
Since the end of September, insurance premium tax (IPT) has gone up for the second time in a year.
The AA called on the government to resist a further rise in the autumn statement next month and expressed disappointment at the Ministry of Justice’s decision to delay planned reforms designed to reduce whiplash claims.
“The whiplash epidemic has dogged the British motor insurance industry for a decade and continues to do so,” Lloyd said. “I do recognise that whiplash can be a serious and debilitating condition. But the activities of claim firms make life more difficult for those with a genuine injury.”
