Average car insurance costs jumped by 14 per cent in the second quarter of 2010, as insurance companies implemented desperate measures to return to profit.

A comprehensive motor policy cost £599 at the end of June, rising by 14.2 per cent – or £74 – in three months, according to price comparison site Confused.com.

The number brought the total rise since June 2009 to 31 per cent, with a policy now costing on average £142 more than it did a year ago.

Confused.com said the dramatic double-digit increases were caused by increased claims costs, rising fraud and a growing number of personal injury payouts. Figures from the Financial Services Authority showed insurers incurred costs of £122 for every £100 of premiums they received.

The website's product director, Simon Lamble, said it was compounding the suffering for motorists, who were already having to endure petrol price hikes and tax increases – and predicted the worst was still to come.

"In the last two years visibility of the market through price comparison sites has kept prices down and driven up competition," he said. "In order to secure customers, insurers have been forced to repeatedly slash their margins, but inevitably this could not continue."

Uninsured drivers added around £30 to the price of policies, while people aged between 41 and 55 saw the biggest increases as they paid to have their children added to their policies. Drivers in Manchester and Merseyside saw the largest quarterly increases – a whopping 18.2 per cent.

If you enjoyed this post, make sure you subscribe to my RSS feed!