Home insurance premiums have risen by around 7% to an average of £143, and car insurance has increased by over 6% to an average of £843, according to the AA. Young drivers have experienced the biggest increase in car insurance premiums, as 17 to 22 year-olds now pay almost 60% more, which translates to an average of £2,251.
The AA has attributed car insurance increases to fraud and the rising number of injury claims such as organised 'cash for crash' schemes.
Simon Douglas, Director of AA Insurance, said that news of the insurance increase prompted a House of Commons Transport Committee inquiry into the car insurance market."MPs at the inquiry learned premium increases have been fuelled by fraud; injury claims; exaggeration of claims; organised 'cash for crash' scams; uninsured driving and poor investment returns because of the recession," Mr Douglas said.
"A sharp growth in the number of accident management and personal injury claim firms has helped to develop a hard-sell system in Britain that encourages people to claim, even if they have not suffered an injury."
This news adds to statistics from the AA in December which revealed that the UK's bad weather led to a 23% increase in car insurance claims, as motorists struggled to cope with snowy and icy roads.
