Motor insurance costs set on turbo

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Figures released today by the AA have confirmed what many drivers already knew, that the cost of their insurance increased by a record amount over the past year.  Premiums have soared by 40% over the 12-month period ending in March. If you add to this the spiralling cost of fuel, drivers are really suffering at the moment and it shows no sign of improving anytime soon.

The harsh winter and the sheer volume of claims due to the terrible weather conditions have also caused the price of home insurance to soar, but nowhere near the level of car insurance. In the first 3 months of 2011, premiums shot up by 5.9%; this takes the average of the ‘shoparound premium’ to a record £872 for a year.

Younger drivers, in the 17-22 age bracket have been hit the worst. The AA reports that they are now paying an average premium of a whopping £3,156 a year. They also warned that the charges for younger drivers were nearing the point when they would be unsustainable. Younger women drivers have typically paid much lower premiums, but this looks set to end with the new EU ruling from 2012 that will end the use of gender when pricing.

The major cause for the rocketing price of insuring your car is thought to be the result of the increasing burden of injury claims and fraud. The director of the AA’s insurance arm, Simon Douglas says that the spiralling fuel costs combined with the rising insurance premiums was very disappointing in that it was driving was now becoming unaffordable for thousands, particularly the young drivers who were short of cash.

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