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Timely revisit though:
This went out on Tuesday:
Record rise in car insurance costs
Car insurance premiums rose by a record amount in the second three months of 2010.
The AA British Insurance Premium Index showed that premiums for third party, fire and theft climbed by 15.9%, and annual comprehensive car cover averaged more than £700 - that represents an 11.5% increase in only three months.
The index, which records the fluctuation of premiums for 2,800 car insurance customers across the UK, cites inflation and increasing fraud as the primary reasons behind the increase.
The three months to 30 June saw premiums rise more than 11%, the biggest increase recorded by the study since it began 16 years ago. The average for policies sold through price comparison sites increased by 12.7%.
The rise in premiums for people looking on price comparison sites was a real blow to those looking to save cash.
"For those shopping on comparison sites, average premiums have climbed by an eye-watering 32.8% or £193 in just nine months," said Edmund King, AA president.
"Even those taking the cheapest prices have typically seen them rise by £98."
Why the increase?
Industry experts state that insurance premiums have been on an upward spiral for some time.
"For years, insurers have been running an unsustainable business," said Ian Crowder, from the AA. "The cost of claims has exceeded premiums by 22%, so for every £100 claimed, insurers were paying £122."
The cost of fraud is another reason for the sharp increase. Despite the UK's falling crime levels, insurance fraud is increasing. A number of people have lied on insurance applications about rates, occupation and claim history among other things.
It is easy to be economical with the truth when buying insurance with online applications, making it easy to manipulate information such as ignoring past claims or convictions, to get the cheapest price.
More serious fraud has also had an impact. Staged accidents in which people have been injured have led to a rise in claims over the past year. Although damage to the cars may not always be covered, the insurance companies have had to meet the cost of third-party coverage.
The cost of meeting accident damage is yet another underlying reason for the increase. Although the AA's report suggests fatal accidents on roads have decreased, accidents and the cost of repairing cars remain high.
This is because, while modern cars are designed to protect the occupant, increased complexity and technology means the cost of repairing these cars can be quite high, Crowder points out.
Who is most affected?
The sharpest rise was found in third party, fire and theft coverage which will hit young drivers the hardest as they typically buy older and cheaper cars and choose this kind of insurance.
Because third party insurance is often the cheapest cover, it's a good option for those on a tight budget, such as young drivers. It also works if you drive a low-value vehicle as the cost of repair or replacing it will likely be less.
Third party, fire and theft insurance premiums increased by 15.8% to an average of £1,224.99, the AA found. For people shopping around, the price was lower, but still considerable. The AA's Shoparound index for third party, fire and theft insurance rose 15.9% to £963.79 on average.
People using comparison sites to shop around could have saved more, but still had to stomach a rise in prices. Third party, fire and theft insurance rose 17.1% to £700.21 on average for people using comparison sites.
People taking out comprehensive car insurance saw less steep rises. The average comprehensive car insurance policy rose 12.1% to £980.05 on average. People shopping around saw rises of 11.5% to £703.79, while those shopping around and using comparison sites paid £536.13 on average - a rise of 12.7% compared with three months ago.
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