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Credit crunch hikes insurance
28 April 2009
The credit crunch could drive up insurance premiums by double figures over the next twelve months, it is feared.
The AA believes rising unemployment and the global recession has led to an increase in burglaries, thefts of premium cars and fraud.
Insurers say this is responsible for rising costs at a time when their investment income is falling.
The AA now says that a rise in premiums is “inevitable” and warns the increases could at least match the 11 per cent rise seen in 2008.
A spokesman for the AA said thefts of expensive cars through domestic burglary and robbery, where criminals steal the keys to the vehicle, have increased by 15 per cent in the past six months.
“We have seen reports that domestic burglaries are set to rise by 50 per cent and there is a direct link between unemployment and burglaries, car theft and fraudulent claims.”
The AA estimates that, for every £100 that motor insurers received in premiums, they were paying out around £105 in costs.
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