Legal fees 'placing pressure on car premiums'

04/08/2009

Car premium payments are on the rise because of personal injury claims and the associated legal fees, it has been claimed.

The Association of British Insurers (ABI) said that it is clear that "cost pressures" are leading to an increase in premiums.

According to AA figures released last week, there has been an 11 per cent rise in average payments in the 12-month period ending June.

In addition, there was a 3.5 per cent rise in quoted premiums between April and June.

Malcom Tarling, a spokesperson for the ABI, said: "[It] is evident is that there are cost pressures on insurers and those remain and are reflected in price of premiums."

He added: "Legal costs are at a disproportionate level at the moment and for every £1 on average that insurers pay out on personal injury claims they are paying out an extra 40p on legal fees."

Tags; Budgeting Advice,

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