Car insurance costs rising 'five times faster than train fares'

Ministers are being urged to accelerate plans for a crackdown on the compensation culture being partly blamed for a surge in insurance premium costs.

Latest figures from the AA pointed to quotes for comprehensive cover rising 11.7% to an average £633 by the end of 2016 - a four-year high.

The motoring organisation charted an increase of £35 alone in the final three months of the year - saying premiums were rising five times faster than train fares.

The average cost of third party, fire and theft cover rose at an annual rate of almost 20%, it added.

The AA's director of insurance, Michael Lloyd, said: "Uninsured driving is rising; partly I believe because of the increases in Insurance Premium Tax (IPT), and fraud - particularly whiplash claims - continue to dog the industry."

David Brown, insurance partner at KPMG UK, added: "The cost of accidental damage is rising fast - and I believe it's becoming a much bigger threat to motor policy price inflation than whiplash.

"As of a year ago, insurers were seeing 20% rises in the cost of average repairs for damage to their policyholders' cars."

According to the Motor Insurers Bureau there were still more than one million uninsured drivers on Britain's roads last year, despite police having the power, since 2005, to seize their vehicles.

The Government has also been under pressure to help bring premiums down through measures to tackle false or excessive injury claims.

It is estimated that both issues add around £75 to an annual comprehensive bill currently.

A consultation, announced in November , floated the prospect of capping or scrapping payouts for minor whiplash injuries.

But the Association of British Insurers suggested the Government was also part of the problem after its increases to IPT, which is due to rise further in June to 12%.

A Government spokesperson told Sky News: "Our consultation on whiplash reform has recently closed, and we will shortly be bringing forward legislation which is expected to deliver an average saving of £40 per policy.

"The regular identification of uninsured vehicles by the Motor Insurers Bureau and DVLA, with owners facing potential fines or prosecution, has also contributed to a long term drop in claims from victims of uninsured drivers.

"This significantly helps make our roads safer and reduces the cost paid by the honest motorist in insurance premiums."