Car insurance premium continues to rise

The average car insurance premium rose by 2.1% between April and June 2015, according to the Association of British Insurers (ABI).

Figures show that the typical cost of a comprehensive policy is now standing at £367 compared to £359 which was recorded in the first three months of the year.

Coupled with the year-on-year increase standing at 2.9% and prices at the same point last year listed at £356 the trend looks set to continue.

Changes to Insurance Premium Tax in November 2015 will further increase the cost of insurance.

Rob Cummings, of the ABI, said: "Motorists have seen a solid two years of lower insurance premiums as a result of market trends and the Government's reforms to tackle frivolous personal injury claims, and over a billion pounds worth of savings have been passed on to customers.

"With pressure on premiums increasing, however, it's important the Government continues its work to tackle the compensation culture and attack the high cost and number of whiplash claims."

"UK drivers benefit from one of the most competitive motor insurance markets in the world, but with pressure on claims costs and an increase in insurance premium tax adding an additional £12.80 to the cost of the average policy from November, other factors are starting to put up costs.

"This makes action against Claims Management Companies and tackling whiplash claims a key priority."

It is suggested that premiums are being increased because personal injury claims are on the rise, with a 12% rise in the number of personal injury claims related to road accidents for the year ending April 2015 compared to the previous 12 months.

Average car insurance premiums remain lower than they were in the second quarter of 2013 at £377 though, as a result of the Government introducing reforms that included a reduction in legal fees for personal injury claims.

This led to insurers passing on around £1.1 billion of savings on to motorists.