Car insurance to cost more in 2011

CAR insurance is likely to go up 3-5% next year, after five years of reductions.

This is the claim of the national economics newspaper Les Echos, based on an analysis of trends this year.

Insurance comparison firm Assurland has already noted increases this year and figures from insurance industry body FFSA show a corresponding increase in insurance firms’ turnover.

Insurance may rise as much as 9% in total over the next three years, Les Echos said.

Currently the average cost is €450 a year.

The increase is not thought to be the result of more accidents.

However, last year insurers had to cope with increased costs owing to worse damage, caused by storms and hail, and careless driving.

So far, this year is looking fairly good as regards accident numbers: 1,786 people were killed on the roads in the first half of the year, down 10.6% compared to the same period last year.

How car insurance works

Insurers are free to set their tariffs. They study their customers, the number of accidents and the cost of covering them so they can work out their risks and set their tariff range.

Factors considered include age, sex, years of holding a licence and of holding insurance, characteristics of the car and whether it is used for work or leisure, the number of designated drivers, the part of the country where it is used, where it is parked and the driver’s previous history.

Premiums also vary by insurance kind, whether third-part or fully comprehensive, and the level of the excess.

Premiums vary greatly from one insurer to another, so it is worth shopping around.