The amount we pay for our car insurance is set to rise this year due to the number of personal injury claims and fraudulent claims made by motorists. In the first quarter of 2009 the average cost of car insurance rose by 1.3% based on a cross section of more than 1,000 car insurance customers using 80 different insurance companies.

The AA’s Simon Douglas stated:

Although 1.3% may not sound much, premiums fell during the same period in each of the past five years, so this increase is a significant indication that insurers are determined to address past underwriting losses this year.

The fact that insurance costs rose in the first quarter is a bad sign as they usually fall due to competition for renewals. The costs are being driven up by fraud and personal injury claims.

The AA says that car insurance premiums will increase by roughly 11% during this year alone.