With a rise of approximately 20 per cent over the past 12 months in the cost of car insurance premiums, many motorists may be in for a nasty shock when the time comes to renew their car insurance this year.

The Association of British Insurers (ABI) has said that the higher premium costs are not down to increasing claims, but rather the legal costs of compensation claims. These costs can add about 10 per cent to the cost of premiums for motorists. It has also been reported that the problem is being exacerbated by so-called ‘ambulance-chasers’, who encourage people to make a claim on their car insurance following an accident, even for relatively minor injuries.

Car insurers also tend to offer their best prices to new customers as they believe that most people will shop around for a quote every year.

Despite this, moneysupermarket.com has carried out research which shows that an amazing one in five Britons automatically renew their insurance policy every year without checking quotes from other companies.

This highlights how important it is to check at renewal time for the best deal available. When it comes to car insurance, loyalty generally doesn’t pay!

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