UK motor insurance premiums rose 10.4 pct in fourth quarter

Jan 20 (Reuters) - British car insurance premiums rose by more than 10 percent in the fourth quarter compared with the previous three months, the largest such increase since 2010, recovery service AA said on Thursday.

The average quote for an annual comprehensive car insurance policy was 625.70 pounds ($887.68) in the fourth quarter, the AA said in a quarterly statement, a rise of 10.4 percent over the third quarter and 20.3 percent over the past year .

FTSE-100 firms such as Aviva (Other OTC: AIVAF - news) , Direct Line (Other OTC: DIISY - news) and RSA operate in the highly competitive car insurance market.

"We expect premiums to continue to rise through 2016 but not at the exceptional rate recorded over the last quarter of 2015. And the sooner new legislation to tackle whiplash claims becomes enshrined in law, the sooner that will be reflected in the premiums quoted for car insurance", Michael Lloyd, director of AA Insurance, said in the statement.

The cost of third-party fire and theft policy (TPFT) policies was up 7 percent in the quarter and 14.8 percent annually, the company said.

Home policies for buildings and contents insurance increased 2.3 percent on the quarter, down 4.2 percent over the year, AA said in a separate survey on Thursday. ($1 = 0.7049 pound) (Reporting by Parikshit Mishra in Bengaluru; Editing by Alan Crosby)