Price comparison sites 'have led to car insurance price increases'

Date: 19/2/2010

Rises in car insurance have been influenced by price comparison websites and insurer experience, a manager for the UK's leading general insurance organisation has commented.

"There have been pressures on premiums for years over a 'soft market', and price comparison websites have made this continue," technical manager at the British Insurance Brokers' Association (BIBA) Steve Foulsham noted.

He added that fraud also contributes to rising insurance costs for motorists.

Fraud cost the UK £2 billion last year, Mr Foulsham noted.

This puts an additional premium on motorists' insurance costs, he explained.

The technical manager was commenting in response to the release of the new Confused.com/EMB Car Insurance price index, which shows prices increased by 12.7 per cent last year.

Prices rose by 6.3 per cent in the last three months of 2009 alone, the index shows, with the cost of the average car insurance policy rising from £450 to £507.

The worst price increase was seen by women aged between 21 and 30, with costs rising by 17 per cent throughout the year.