Increases

Car insurance costs look set to rise from October 2006 following a move by Norwich Union, the UK's second largest car insurer, to raise its rates by an average of 16%. The firm said its hand had been forced by a similar rise in claim costs over the past two years, during which time insurance rates had remained static.

Norwich Union said claims for personal injuries had been the main reason for the rise in its costs and insurance for riskier customers, such as young men, will rise by up to 40%.

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