Motorists 'face £30 insurance hike next year'

Motorists could face the biggest hike to their premiums since 2011 as insurers seek to improve their profits, a new report has warned.

The cost of car insurance is expected to rise by 8% in 2016, adding around £30 to the average premium, according to consultants EY.

Its report said insurers have been battling to cover the rising costs of claims and need to pass these costs back to consumers.

Tony Sault, of EY, added: "Insurers are a long way from achieving a repeat of 2013, when the industry turned a profit for the first time in 20 years, so a further hike in premiums comes as no surprise."

"By passing some of the costs on to the consumer, the industry may be able to reduce the amount of reserves they have to release compared to previous years, but even an 8% rise in premiums will fall short of securing profitability."%VIRTUAL-ArticleSidebar-motoring-guide%

Kasey Cassells, from price comparison site uSwitch, warned the price hikes would leave many struggling to cover the cost of driving.

She said: "This predicted hike in premiums is another blow to drivers who have already been hit by a rise in insurance premium tax this year.

"Young drivers who tend to have the highest premiums to pay could see their policy increase by £40 due to the insurance premium tax hike.

"This additional increase of a further £30 per policy may well push more drivers off the road as they struggle to cope with the ever rising cost of driving.