Insurance premiums "rise with cost of claims"
Insurance premiums have to go up as a result of the rising costs of claims on policies, the Association of British Insurers (ABI) has explained.
The body's spokesperson Malcolm Tarling said that insurance policy prices reflect claims, so if the cost of personal injury awards increases, so do premiums.
However, the insurance market is still competitive and people should shop around to get the best rates, he advised.
"There remain plenty of companies out there willing to provide competitive insurance but at the end of the day the cost of insurance across the board is going to be affected by the cost of claims," Mr Tarling stated.
Insurance fraud can also impact on premiums, he added.
According to the AA British Insurance Premium Index, more than £20 has been added to the average quoted premium for comprehensive car insurance over the three months to June 2008.
The average policy now costs more than £700, the figures revealed.