Car and home insurance premiums rising

The fall in car and home insurance has come to an end, with an increase recorded in premiums, according to one provider.

The AA’s British Insurance Premium Index has shown that home buildings insurance increased by three per cent while home contents insurance went up by two per cent.

Flooding in the UK this summer is thought to be directly linked to the new figures – the washout cost the insurance industry billions of pounds in claim payouts.

John Close, insurer relations director at the AA, said: "We now see the result of that devastation reflected in premiums as insurers meet the cost of drying out and repairing homes as well as temporary re-housing of families while their homes were made habitable once again."

Annual comprehensive car insurance rates rose by one per cent, while third party, fire and theft cover rose by 3.5 per cent.