According to a survey conducted by Datamonitor, a U.K-based consulting firm, automobile premiums in the U.K. and Ireland, which have already risen by around 20 percent in the last year, are set to increase further.
The report points out that intense competition had driven rates to artificially low levels, and most insurers consequently suffered significant underwriting losses -an estimated £1.86 billion in 1999.
While accident and crime rates have slightly decreased, the cost of settling the average claim has risen, as have the number of cases which end up in the courts. The amount of jury verdicts in favor of claimants has also risen. With more cars on the road, costs have continued to climb.
The survey predicted further rate increases between 10 and 25 percent. As the average cost of a fully comprehensive policy in the U.K. now averages around $860, British and Irish car owners could well be paying over $1000 for coverage by the end of the year.
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