Motor insurance hikes ‘may lead to debt trouble’

Increasing numbers of road-users may soon require debt help after it emerged motor insurers have upped their prices.

According to the second quarte…

Increasing numbers of road-users may soon require debt help after it emerged motor insurers have upped their prices.

According to the second quarter 2010 Confused.com/EMB Car Insurance Price Index, the average cost of comprehensive car cover increased by 14.2 per cent between April and June this year.

This equates to placing an additional £74 on to the average policy, while the last two rises for previous quarters only measured at 4.3 per cent and 6.3 per cent.

It means costs for comprehensive vehicle insurance have ballooned by 31 per cent in the last 12 months, which makes the average premium now £599.

Those set to suffer most from the hikes appear to be 41 to 55-year-old drivers – with women in this age bracket especially hard-hit as they face a 14 per cent penalty for having named drivers other than their husbands.

Areas that witnessed the greatest regional quarterly increases for comprehensive policies were Manchester, Merseyside, London and Northern Ireland.

Simon Lamble, product director at Confused.com, noted the insurance industry shelled out £400 million to the Motor Insurance Bureau in 2009 concerning uninsured driver incidents – which added £30 on to the policies of honest road-users.

On the escalating prices, he added: “This is a massive blow for motorists who have already suffered at the hands of petrol price hikes and insurance premium tax increases.”

A recent study carried out by AA Financial Services discovered more than half of consumers stated they will be willing to cut back on the amount they use their car in an effort to reduce their outgoings.

By Joe Shervin

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