Fraud 'driving insurance cost hike'
A jump in the number of personal injury claims and a recession-driven increase in fraud is hitting motorists where it hurts - their pockets.
The AA says average premiums for comprehensive cover jumped by 5.6% in the three months to September - a rise the UK's major insurers put down to fraud and the expense of fighting injury claims.
Direct Line and Churchill owner Royal Bank of Scotland registered a 22% rise in such claims during the last quarter, causing the bank to set aside an extra £118 million for legal costs that all but destroyed divisional profits.
The Association of British Insurers, which has been fighting a campaign to reduce the legal costs incurred by the sector for handling such claims, says fees are crippling the industry.
"One of the key concerns is not the amount of money paid out in claims, it is the legal costs - the disproportionate amount which is paid out in fees," spokesman Malcolm Tarling explained.