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Car insurance to rise 10%, says AA


The AA have claimed that car insurance costs could rise by up to 10% throughout the year.

Annual car insurance prices have fallen in the last three years due to a crackdown on fake whiplash claims and inflated hire car and repair bills that padded out premiums, but the AA have predicted 2015 to see an increase in costs.

The cost of annual comprehensive car insurance has risen by 0.2% to £540 in the final three months of 2014, which may be the start of the trend, but the total was still £200 cheaper than the peak in 2011, the AA said.

The AA have claimed that price pressures have forced down prices, and done more to help consumers than recent Ministry of Justice moves to cut false and exaggerated personal injury claims. The number of personal injury claims have actually increased since the reforms were announced, leading to the slight increase in car insurance prices. The AA now welcome the Government's next set of proposals, which will ban personal injury claims being settled without a medical assessment taking place.

Janet Connor, managing director of AA Insurance, said: "Some insurers may have lost business by increasing premiums, leading to a 'year-end sale' to boost market share, so car insurance is still very good value."

"Nevertheless the underlying trend is upward, although I think premiums will struggle to rise past 10 per cent by the end of the year."

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