Motorists face insurance price hikes

Last Modified: 30 Jul 2008
Source: ITN

Insurance group Admiral has warned that car insurance premiums are likely to be on the rise.

The company, which also owns Elephant.co.uk, Diamond and price comparison website Confused.com, said there was a "real prospect" of premiums rising faster than claims for the first time in seven years due to a stronger pricing environment across the wider market.

In the first half of 2008, its premiums were 3 per cent higher than a year ago - although this is around half the 5-6 per cent increases seen more widely.

David Stevens, the group's chief operating officer, said: "A car for most people is a necessity, not a luxury, so demand is not going to fall off a cliff as it will in other sectors."

Mr Stevens added that factors such as higher petrol prices - leading to lower car usage - were also a boon for the firm as they led to fewer claims.

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