A 17-20 year old man now has to pay an average £2,879 for comprehensive car insurance cover.
The average cost of comprehensive cover was up 8.6% between July and September 2010, slowing down from 14.2% recorded in the previous quarter, according to the latest EMB Car Insurance Price Index (CIPI).
Premiums rose by 37.5% from October 2009 and shown a steady, rising trend since about April 2009. The hike in comprehensive car insurance for young drivers was an average £51 to £650 in the quarter.
The index also reveals that third party, fire and theft policies customers, generally younger drivers, continue to pay more: 11.7% this quarter on top of 18.4% in the last. This adds up to a 54.2% increase over the last 12 months.
Meanwhile, the AA has separately disclosed the biggest rise in car insurance premiums since the driving organisation started benchmarking 16 years ago.
No-win, no-fee lawyers push up costs of cover
The AA figures show cover for 17 to 22-year-old men is up 47% in a year to £2,457.
“If you have an accident which leaves someone disabled, the claim can be up to £15m,” said Simon Douglas, director of insurance at the AA. “Young men are twice as likely to be involved in these incidents than young women.
“Some of that is being driven by no-win, no-fee lawyers. Their numbers have doubled in the last two years.”
EMB partner, Peter Lee, said: “The price corrections that have been taking place over the past year or so have been essential to getting many private motor insurers back on an even keel after poor 2009 results. The scale of bodily injury claims inflation revealed in a recent study of 85% of the private motor market has emphasised the need for price rises.
“However, the level of increases is starting to slow down; with each month in the quarter showing flatter price rises than the previous one. Medium-term I think there’s a realisation of the need for additional strategies for dealing with rampant bodily injury costs and managing fraudulent behaviour such as the wider use of risk indicative external data.”