Car insurance costs soar £210 on last year

Motorists have been hit with steep rises in car insurance premiums after the average policy went up by £210 last year, the AA has revealed.

The increases pushed the average fully comprehensive policy up by a third to 843, according to the AA's British Insurance Premium Index.

The findings also showed prices went up by an extra 51, or 6.4 per cent, in the last quarter of 2010 alone.

According to the AA, the increase added to the cost of driving ahead of fuel duty and VAT increases in January as well as the 1 per cent increase in Insurance Premium Tax.

Young drivers were hit hardest with fully comprehensive premiums for 17 to 22-year-olds rising by more than 58 per cent over the year to 2,251.

Third party, fire and theft policies, which are most commonly bought by young drivers, also rose by more than a quarter in the last three months with the average price for the year reaching 1,390 - a rise of more than 70 per cent.

Simon Douglas, director of AA Insurance, said: "There has been no let-up in premium increases as insurers struggle against losses from 2009, when for every 100 taken in premiums, 123 was being paid out in claims. This has led to the biggest annual premium increases we have seen since the AA Index began in 1994."