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Car insurance premiums 'have dropped'

Motorists are spending less on their car insurance than they did at the end of last year, new figures have revealed.

Research by the AA found that the average quote for an annual comprehensive insurance policy fell to £802 during the first quarter of 2007.

During the previous three-month period, car insurance premiums had risen by 4.35 per cent to an all-time high of £806.

Kevin Sinclair, managing director of AA Insurance, commented: "I had expected premiums to continue rising and I think the underlying pressure is still upward.

"Most insurers continued to apply small increases in an effort to close the gap between premium income and claims."

Mr Sinclair added that since car insurance premiums rose by nearly six per cent last year, further increases are likely throughout 2007.

This follows a recent warning from Co-operative Insurance that young drivers could be priced out of the car insurance market if the number of accidents involving under-25s is not reduced.

The firm stated that the younger generation could become completely uninsurable if nothing is done to stem the number of young motorists killed or seriously injured on the roads.

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10/04/2007 16:55:47

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