Recent stories have been suggesting that the recent growth in the number of whiplash claims will push up car insurance premiums and now recent reports are claiming that car insurance premiums have reached an all time high and look set to rise over the next 12 months. The average quoted premium for a fully comprehensive cover has risen by 2.9 percent since October rising to a new high of around £741, 66; these figures come from the car insurance provider AA.

Figures for third party, fire and theft insurance which is generally more popular with younger drivers has risen by 3.4 percent to an average annual price of around £931.31, whilst the shop around figure (if a price comparison site is used) rose by 3 percent to a annual price of £618.91. Even though this kind of cover is generally more popular with younger drivers if you are an older driver with a few years no claims then it could be worth downgrading to third party cover. This is definitely worth thinking about especially if your car is not worth a lot of money.

Comprehensive car insurance cover has also risen by in the last few months with the average premiums rising by 8.7 percent whilst the shop around index rose by 7.2 percent. Comprehensive cover will cover against nearly all eventualities but you may be able to save hundreds a year if you downgrade to third party. The premium rises has definitely re-enforced the point that shopping around for your car insurance quote is now more important than ever especially in this current recession.

Simon Douglas, director of AA Insurance “Capital is also scarce within the current economic climate and some insurers will need to respond by reducing the amount of capital they have tied up in their business. This will also put upward pressure on rates. I expect average quoted premiums to have risen by 10 to 12 per cent by this time next year.”

Douglas expects companies to become fussier about the risks they take on. “For instance, we have seen some insurers pull out of the third party, fire and theft market which is dominated by young drivers. In fact, about half of the UK’s insurers won’t cover young drivers at all.”

There are a number of different reasons for the recent rise in the last couple of months has seen some of the biggest changes to the British economy, the other reason is that whiplash claims have risen greatly meaning that insurers have to put up premiums to cover the increased number of claims being made. The number of personal injury claims and associated legal costs rose by 22 percent to around £6.16bn and is expected to hit £10.19bn. It’s not only the increased number of compensation claims pushing up premiums detected insurance fraud also rose last year to 17 percent.

It seems like with most things in 2009 car insurance is going to be more expensive so it is more important than ever to shop around for the best possible quote available to you.