UK motorists will now expect to pay an average of £486 for an annual comprehensive cover according to the AA’s benchmark British Insurance Premium Index.

The increase in comprehensive cover means that the cost of premiums is up by £39 more than the same time last year. At the same time, figures also show that car insurance premiums increased by 7.5 per cent to an average of £724.28.

The AA report suggests that the annual average cost was just £328 in 1994 when it begun comparing premiums. According to market analysts, Datamonitor, personal injury claims are still a major concern for UK car insurers.

The company says road traffic accidents are the major contributing factor to increased claims. Datamonitor also reveals that total motor claims costs is predicted to reach £10.9 billion by 2012.

Simon Douglas, director of AA Insurance, says: “Despite these rises the car insurance industry continues to make an underwriting loss. “For every £100 taken in premiums, more than £105 is paid in claims. Insurers are particularly concerned about increasing legal costs and personal injury claims which last year rose by 22 per cent.”

However, He adds: “The average car accident insurance claim for a young male driver is nearly £4,500 compared with £2,700 for their female peers. For drivers aged over 30, the average claim is £1,400 for men and £1,200 for women.”