Car insurance more expensive, home less

The cost of car insurance in the UK has risen slightly, while home insurance premiums have become cheaper, according to new research.

The average cost of an annual fully comprehensive car insurance policy inched higher to £757 over the last three months, the AA's British Insurance Premium Index reveals.

However, this is a similar price to that in January 2003, which the AA attributes to tough competition in the car insurance market.

Elsewhere, the average cost of home buildings insurance has fallen for the sixth consecutive quarter to £203, cheaper than 11 years ago when the AA index began.

Kevin Sinclair - managing director of AA Insurance - commented: "Tough competition in the car insurance market has helped to keep the lid on premiums over the past couple of years, despite steadily rising claims costs.

"I think this modest rise is common sense for the industry and, I believe, will turn out to be the best solution for customers."

Regarding home insurance, he explained: "While falling crime rates and few weather-related claims over recent years have contributed to falling premiums, many providers have also introduced discounts for buying online."