Car insurance prices continue rising

Car insurance prices have continued to rise steeply in the first quarter of 2010, according to the Confused.com/EMB Car Insurance Price Index, rising by 4.3%.

Although this is a drop from the 6.4% increase seen in the final quarter of 2009, it is still substantially more than the first quarter of 2009 (2.6%) and takes the annual increase seen since last March up to 14.3%. The average quoted premium has risen to £524 at the end of March 2010, an increase of £66 over the past year and £21 in just the last quarter.

Simon Lamble, Product director at Confused.com commented: "These figures come from over 13 million real quotes on Confused.com, so they give a true barometer of the state of the market. We expect that the price rises taking place across all age groups will cause even more consumers to seek good value alternatives when their policies come up for renewal."

Lamble adds: "The absence of Quinn UK will also have a small but noticeable impact, increasing premiums still further, especially for young drivers."

17-20 year olds generally saw the biggest increase in the quarter (6.6%). However over the course of the whole year, it was 26-30 year old women who were the hardest hit, with a 17.3% annual increase.

EMB Partner, Peter Lee, said: "In pure monetary terms, younger females still pay less and younger females cost insurers less overall in claims than younger men. But the recent larger increases affecting women suggest that many insurers are narrowing this price differential between the sexes at younger ages."

Whilst the majority of the North West region experienced the biggest price rise in the quarter at 6.2%, Manchester/Merseyside enjoyed the third lowest rise in the country, of 3.1%. Wales also saw a substantial increase in prices with increases of over 5%. Northern Ireland was the only area to experience a price decrease in the quarter.

Some postcode areas, notably Carlisle, that have experienced relatively mild premium increases in the past, saw sizeable increases in the first quarter of 2010. Other areas falling into that category included Bromley, Bath, Dorchester, Exeter, Lancaster and London-West.

Peter Lee noted: "With motor insurers' underwriting results due out from the FSA in the coming quarter, it will be interesting to see what impact price increases up to the end of 2009 have had on profitability. But with claims costs still on the rise, I suspect there is more pain to come for the consumer before prices level off."