Young drivers car insurance news
12/11/2009
Premium hikes expected, says AA
Young drivers car insurance customers have been told by the AA to brace themselves for a pronounced rise in the cost of premiums.
According to the organisation, the average cost of a premium has risen by around 14 percent in the past year, the biggest such rise in more than a decade.
Nathan Douglas, the AA's insurance director, said that many motorists would be surprised by the surge in cost, particularly those seeking renewal. And with young drivers car insurance already costing more than the typical premium, it has never been more important that prospective policyholders find the best possible deal.
Douglas presented a stark picture to young drivers car insurance customers, many of whom have already had their pockets hit by recessionary pressures. He said, "Last year one industry commentator said that premiums must increase by at least 20 per cent if the car insurance sector was to return to profitability."
"At the time I thought this unlikely but it looks as if that prophecy might be fulfilled.
"Despite motor insurance being one of the most competitive markets in the UK, insurers have little choice but to put premiums up," he added.
The motor insurance quote guru said that for every £110 that insurers pay out for claims, they are receiving only £100 in premiums, making rising costs inevitable.
