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UK car insurance premiums reach new high, AA reveals

The AA's latest British Insurance Premium Index has revealed that the average cost of an annual car insurance premium has greatly increased during the final quarter in 2006, soaring to a new high.

<p>The quarterly index has been used since 1994 to track car and home insurance premiums. Its latest installment indicated that, in the fourth quarter of 2006, the average premium quoted for a comprehensive car insurance policy rose by 4.35% to almost GBP806.<br /><br />The average premium for customers purchasing third party, fire and theft (TPFT) cover also saw a slight rise, bringing the premium to almost GBP1,000. This type of insurance tends to be bought by young drivers who suffer high premiums due to claims history and the fact they hold little or no claims bonus. <br /><br />Since the launch of the index, comprehensive car insurance has almost doubled from the average figure quoted in July 1994. The previous highest average quoted premium was GBP777.57, in January 2004. <br /><br />Furthermore, the trend in increasing premiums is forecast to continue into 2007.<br /><br />Over the past three quarters, premiums have risen by nearly 6% and I believe this trend will continue, said Kevin Sinclair, managing director of AA Insurance.</p>