Fraud Drives Up Car Insurance Costs

Drivers are having to pay far over the odds for their car insurance to make up for the spiralling number of fraudulent claims, according to one insurer.

Average fully comp policies now cost 30.9% more than they did last year, according to AA Insurance, which said this is highest annual price climb it has seen in 16 years of monitoring premiums. 

Younger drivers are suffering most, with car insurance policies jumping up 11.5% in the past three months for motorists aged under 30.

AA Insurance director Simon Douglas said: "While the organised 'cash for crash' scams that ripped millions of pounds off insurers have made headlines, the problem of car insurance fraud is much deeper and has become one of the principal drivers of insurance premium inflation."

The insurer identified fraud was one of the main reasons why premium prices climbed so rapidly, following a recent Association of British Insurers (ABI) survey that revealed 5% of motorists under 35 had staged an accident to make a claim.

ABI said a further 15% said they would consider making a fraudulent claim but had not done so, while the industry had found at least £410 million-worth of fake car insurance claims in 2009.