Record rise in the cost of motoring insurance

Car insurance premiums are being pushed up by almost a third due to rising levels of fraud, experts warned today.

The average comprehensive policy costs 30 per cent more this year than last, according to AA Insurance.

It is the biggest increase since the company’s records began 16 years ago, with younger drivers facing even steeper price rises.

Premiums for those under 30 have soared by 11.5 per cent in the last three months alone.

But the young have also been found more likely to make a false insurance claim.

A separate survey for moneysupermarket.com found that 5 per cent of motorists under 35 have staged an accident to make a fraudulent claim and 15 per cent would consider doing so.

The Association of British Insurers recently said that insurers uncovered £410million-worth of fraudulent motor insurance claims during 2009 – and the AA said increased fraud is a central reason for rising premiums.

Simon Douglas, director of AA Insurance, said: ‘The evidence from moneysupermarket.com, suggesting that thousands of people are attempting to try “cash for crash” scams themselves – perhaps to get someone else to pay for past damage or to make a claim for non-existent whiplash injury – is deeply worrying.’

The group said other types of fraud, such as fronting, where a named driver is in fact the main driver, withholding information, and lying about where a car is kept or what the driver’s occupation as, were all also on the rise.

But Mr Douglas said insurers were getting ‘wise’ to the way fraudsters can manipulate price comparison sites and introducing new technology to catch them.