Warning of car insurance cost rise

Vehicles Image copyright PA
Image caption The AA says that insurance premiums will not rise very quickly

The cost of UK car insurance will rise over the rest of the year, according to the AA, despite a fall in the first quarter of 2015.

Its index of the cheapest deals on the market showed that the cost of annual comprehensive car insurance fell by 1% compared with the previous quarter.

That took the cheapest deals down by £5.58 to £530.47.

The AA said said that drivers aged over 60 saw premiums rise over the same period.

Janet Connor, managing director of AA Insurance, said that other age groups would start seeing insurance costs rise steadily too.

"We are starting to see insurers quoting higher prices. I think that is the beginning of a trend, but the market remains very competitive," she said.

"The rate of increase is not going to be turbo-charged."

Image caption Housing insurance costs were reduced, partly owing to the weather

The cost of car insurance has fallen by nearly 6% compared with the same quarter a year earlier, the AA said.

Bigger falls were recorded in the cheapest deals for home insurance, according to the insurer.

The average quote was down 9.6%, or nearly £17, among the cheapest deals in the last year for home and contents insurance.

A long period of benign weather had helped keep costs down, Ms Connor said.

"Home premiums are most likely to be affected by extremes of weather and the recent winter has on the whole been notable for its lack of heavy rain, snow, winds and extreme temperatures," she said.

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