The cars owners will now have to pay more for their cars insurance. As told by the motoring organizations, there has been a rise in the car insurance premiums as Companies want to compensate the fraudulent claims. The premium cost has been escalated by 33%, but not in all, but some cases. It has even passed the rate of inflation. The hike is the highest in the last 16 years.

The fraudulent claims include claims for accidents that never occurred or dramatic accidents and false description of personal details on price comparison websites.

As per the insurance providers, the fraudulent claims and the legal costs account for 10% extra premium to them that they are shifting to the consumers. But they are making efforts to keep this rate low.

The cases of fraud have been rising more than the crime cases.

The motoring industry experts revealed that this increases in the insurance premiums would wipe away a number of young and low-income drivers from the market and also there would be an increase in the uninsured vehicles. The figure is estimated to be around 1.5m. An average premium now stands at £704. The insurers are also chucking out the cheaper third party fire and theft policies for younger drivers.

The increase in the insurance premium tax from next January will add on £15 to the bill of young drivers.