Motor premiums are continuing to rise sharply in price, according to the AA's quarterly British Insurance Premium Index.

The July to September figures, based on open market rates from 37 insurers, show average motor premiums rose by 3% over the previous quarter.

However, home insurance for both contents and buildings has remained virtually unchanged.

The motor insurance market has now risen by more than ten per cent since the start of the year with some risks rising by as much as 25%.

The trend shows little sign of abating as the market has still to break back into profit after five years of underwriting at a loss.

New claims inflation, mainly caused by changes to how the courts calculate the level of compensation, is likely to balance out the rises imposed so far.

Moreover, the National Health Service (NHS) is now recouping much more of the cost of patient care and the Government has increased Insurance Premium Tax by another per centime point.

"Once again, average motor premiums are up by about three per cent over the previous quarter," said Kerry Richardson, managing director of AA Insurance.

"Consumers can save about thirty six per cent on average premiums by shopping around, but even the cheapest prices are increasing.

"Since July this year, the average shoparound has gone up by five per cent.

The "shoparound" premium is the average of the three lowest premiums quoted by the insurers in the market survey.

This more closely reflects the price paid but does not take account of discretionary discounts reflect.

The Index shows average car insurance premiums based on open market rates from 37 of the UK's leading insurers. It also shows home premiums from 24 insurers.

The base rate of 100 was set at July 1994. The British Insurance Premium Index gives a quarterly update on the movements of home insurance on 50 risks – both buildings and contents – and on 50 car insurance risks - 32 comprehensive and 18 non-comprehensive.