British auto insurance premiums rose in second quarter, AA says

However the AA has given warning that the sudden Insurance Premium Tax could well drive larger premium increases as of November.

On a regional basis, drivers in the Border and Tyne-Tees and West Country areas saw the biggest jumps in their auto insurance premiums over the three months to the end of June, both seeing a 6.4% increase, while drivers in Wales were the least affected, with a 3.9% rise.

Janet Connor, managing director of AA Insurance, said that the premium rise had been expected.

AA British Insurance Premium Index has revealed the average quoted Shoparound price for buildings and content insurance policies has increased for the first time in three years.

The AA estimates that the rise in insurance premium tax, announced by Chancellor George Osborne in the Budget, will add £18 to the cost of the average comprehensive auto insurance policy.

The report said that young drivers faced the biggest rises to premiums between April and June, with those in their twenties enduring an average annual increase of more than 6% to £682.62.

Scotland remained the cheapest, with the average quote at just over £380.

She continued: “So insurers have been releasing their reserves to maintain their competitive edge to the point where this is no longer sustainable – and we are seeing premiums beginning to rise once more”.

It cited a rise in the Insurance Premium Tax

Auto insurance premiums have jumped 5.5 per cent annually in the last three months, bringing to an end three years of falls, according to data from motoring group the AA.