Cost of Vehicle Insurance Rose Heavily in 2009
It has been reported that car insurance rose more in 2009 than at any other time in the past 15 years. According to AA Insurance Service, prices increased by 14 per cent over the last 12 months.
Ian Crowder, a spokesman for the firm, noted that premiums have continued to rise during the recession, regardless of the competition in the insurance market.
“Because of the recession, motor insurers have seen investment returns falling and have been digging into ever-diminishing reserves to meet claims.” He added, “At the same time the cost of claims has been rising – at one stage the industry was, on average, paying out 110p in claims for every 100p taken in premiums – a situation that is clearly unsustainable.”
Profession services from Deloitte noted last month that most of the motor insurance providers have made losses during the recession.