AA urges motorists to compare car insurance

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The Automobile Association (AA) is urging British motorists to compare car insurance premiums in the light of increasing costs in its British Insurance Premium Index.

Rising costs in the last quarter of 2006 mean average premiums are now at their highest level ever, according to AA Insurance.

This follows a period of competition in the market since January 2004, with major providers such as Norwich Union now beginning to return to prices more in line with the cost of a claim.

Kevin Sinclair, managing director of AA Insurance, said: "Other insurers are now following Norwich Unions lead and have increased premiums to more realistic levels."

"Over the past three quarters, premiums have risen by nearly six per cent and I believe this trend will continue," he added.

Prices rose by 4.35 per cent to over £800 in the last three months of 2006 alone, topping the January 2004 figure of £777.

However, AA claims that the home insurance market remains steady except for a small increase in building insurance following adverse weather conditions.

Building insurance from AA provides unlimited cover for rebuilding and standard protection against accidental damage.

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