Compensation culture blamed as car insurance costs soar

CAR insurance premiums soared by nearly 20 per cent during 2009 as growing compensation culture pushed up insurers' costs.
By The Newsroom
Published 28th Jan 2010, 10:43 BST
Updated 28th Jan 2010, 10:43 BST

The cost of comprehensive motor insurance jumped by a record 18.7 per cent during the year, rising by 7.2 per cent in the final quarter alone to leave average premiums at just over 1,000, according to AA Insurance.

The group warned that premiums looked set to continue rising during the coming year as insurers struggled to cope with exhausted reserves and increases in claims costs.

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It blamed the situation on a sharp rise in personal injury claims, with people pursuing compensation even for minor injuries and being encouraged by personal injury lawyers whose costs, as well as compensation gained for clients, are met by insurers.