UK motor insurance 'expensive'

Britons have more accidents than most of their peers

Britain is one of the most expensive places in Europe to insure a car, because of the high number of road accidents and growing "compensation culture".

While the high insurance rates in Britain might at first be seen as another sign of what has become known as "rip-off Britain", the fact is that much of the premium is being used to pay out claim costs

Margarida Judice, Watson Wyatt

According to consultants Watson Wyatt, Britain has one of the highest numbers of road accidents in Europe, at about 5,600 per million inhabitants.

Only Austria, Belgium, Germany and Portugal record higher figures.

The factor accounts for one of the highest motor premiums in Europe with only Ireland and Luxembourg being more expensive.

Wealth effect

Watson Wyatt's research found that the cost of paying for the treatment, including compensation, seems to be linked with a country's wealth.

Average premiums in Europe's wealthier countries, such as Britain, Austria, the Netherlands and Switzerland are higher than countries such as Greece, Spain, Portugal and those in Eastern Europe.

The Nordic countries - Denmark, Finland, Norway and Sweden have lower average motor premiums, which Watson Wyatt said was perhaps a reflection of lower population density, careful driving, and good roads.

"While the high insurance rates in Britain might at first be seen as another sign of what has become known as 'rip-off Britain', the fact is that much of the premium is being used to pay out claim costs," said Watson Wyatt's Margarida Judice.