From This is Money:
Figures from the latest benchmark AA British Insurance Premium Index reveal that motor insurance premiums are up by an average of 19% in the last year alone, and rose by more than 7% between October and December 2009.
And insurers claim they are paying out more than they are taking in. A survey carried out by industry experts EMB, revealed that last year for every £1 the retail motor industry received in premiums, it had to pay out £1.20 in costs and claims.
Analysts warn that this is a knock-on effect from the rise in personal injury claims fuelled by no-win no-fee lawyer adverts on television and the competitive nature of online insurance. This made 2009 one of the industry’s least profitable years on record.
Premiums for law-abiding drivers are also being pushed up because more people are choosing to drive uninsured. About 1.6m are believed to be driving without insurance, which leads to a ‘surcharge’ of £30 per policy for drivers who do pay….