By BBC News Online's Orla Ryan UK motorists have already been driven to protests by the high price of petrol at the pump. Premiums were being driven at unrealistic rates to drive business AA Insurance Services Comprehensive car insurance averaged 629.04 in April this year, according to the AA insurance index, compared with the average July 1994 premium of 367.27. More people are claiming compensation, say the insurers, and this is the main reason for the rising premiums. At the same time, competition from telephone and online insurers has driven down premiums.
People are much more inclined to sue after an accident.
We are seeing payouts for compensation claims increase. If people are entitled to compensation, they should have it. The Association of British Insurers estimates that for every 1 insurers collect in premiums, they have to pay out 1.15. And premiums have so far failed to rise in line with costs, argue the insurers. These high costs are the reason why last year UK motor insurers made a combined loss of 1.3bn.