Motor insurance premiums soar in 2012
Motorists are being forced to pay 15.3% more for their car insurance than a year ago, according to the latest research from the AA.
The average cheapest annual premium shot up to £971.40 in 2011 and in the last quarter of the year alone prices increased by 5.4% or £50.
After a small fall in prices during the third quarter of 2011, the AA says this sharp hike is a surprise.
The price difference is worked out by using the AA's Shoparound Index, which takes an average of the three cheapest quotes available from a range of insurers and brokers.
The increase has been blamed on a rise in the number of personal injury claims in the last 12 months and the AA predicts further increases in 2012.
"Reform of the way that personal injury claims are managed can't come soon enough. It is wrong that injury claims are rising while the number of accidents on Britain's roads is falling," says Simon Douglas, director of AA Insurance.
There are now fewer cheaper deals around and the AA says younger drivers are suffering the most as many insurers are pushing up their premiums for young drivers or refusing to insure them all together.
Young men aged 17 to 22 are now paying an average of £3,194, while women of the same age are paying an average of £1,879 - 41% less.
"Young drivers seem to be the biggest losers with a higher-than-average increase for them. It's clear that young drivers continue to be of concern to insurers, while many no longer offer cover to those under 21," adds Douglas.
However, once a European Court of Justice ruling is introduced in December insurers will no longer be able to take gender into account when pricing polices. This means anyone renewing their policy after this date will be affected and young women will see the biggest premium increases.