Car insurance premiums have jumped up to 25 percent in the past year and insurers are blaming an increase in road traffic accidents as the industry lost $1.6 million last year.

Insurance companies across the Island have increased their car insurance premiums by at least 15 percent. The value of the car and one?s driving record and any waivers owners may wish to apply for also determine how much drivers will be forking over every year for car insurance.

BF&M sent out a letter this month alerting customers to the premium increases, citing the average cost of private car claims has risen by 59 percent since 2000 due to the increasing number of accidents on Bermuda?s roads.

CEO Glenn Titterton warned of the rises if insurance premiums across the board after there was significant damage to cars after hurricane Fabian last September. Mr. Titterton said the increases had to be put in place after the industry lost 1.6 million from its motor insurance business last year.

In the cover letter to customers, Assistant Vice President of Personal Insurance, Diane Boca, said premium increases over the same period have been modest by comparison and are not keeping pace with the rapidly increasing claims cost.

?From the first of January we will be applying increases to all motor car premiums in an effort to make this line of business profitable. We will also be focusing close attention on those cars, which have had an accident and in certain circumstances these risks will face a bigger increase than the norm.?

In the BF&M said claims for third own damage and third party damage show no signs of reducing and further measures are necessary if motor insurance is to become viable.

So what would it cost if I was a 24 year old driver who owned a 2003 model convertible BMW valued at $58,650 and was never involved in any accidents?

Purchasing a third party insurance premium for my convertible would cost a total of $271.20 if it was put in effect today, July 13. The price reflects a 65 percent no claims discount on a total price of $1397.

The premium would be renewed on December 13, or the customers birth date, at a cost of $623.12, reflecting the 25 percent increase.

The third party insurance coverage includes excess of $600, meaning the driver is responsible for the first $600 in any accident situation.

Third party liability comes to a total of five million, and third party property damage comes to a cost of $500,000. Medical insurance comes to $500. These numbers are so high to adequately cover medical bills from a road traffic accident.

With comprehensive insurance the premium would cost $950 and would be renewed in December with an increase, to a total cost of $2300. A comprehensive insurance coverage at Colonial insurance would cost $2500 dollars if you owned a BMW convertible.

A representative at the company told The Royal Gazette that the company increased its premiums by ten to 15 percent on May 1, 2004.

?The increase in claims being made is reflected in the percentage of claims received every year,? said a company representative. ?Customers are concerned about the rising car premiums but we are working to move in line with the rest of the world and stay competitive with other insurance companies in Bermuda.?

Argus Insurance President & CEO Gerald Simons said yesterday that premiums have risen in the motor car division by over 20 percent.

?The increased number of claims and the cost of repairs also contribute to the rise in premiums. The number of claims is reflected in the rise in premiums.?