Quarterly fall in car insurance premiums

The average premium for a car insurance policy fell slightly in the first three months of 2012, research has revealed.

Research by the AA has revealed that the cheapest premium for a comprehensive car insurance policy went down in the first quarter of this year.

In its British Insurance Premium Index, the AA found that the five cheapest premiums dropped by 1.1% to an average of £1,132.

Overall, the market average for a comprehensive insurance policy remained consistent form the last quarter at £1,452.
“I can’t see this drop in premiums being sustainable for long.  My fear is that if prices do continue to drop, we’ll see a repeat of 2009, when industry losses led to premiums suddenly rocketing up following a long period of little movement,” said Simon Douglas, director of AA Insurance.
“The industry is still having to deal with fraud as well as increasing numbers of personal injury claims, despite the number of crashes on Britain’s roads falling. Industry costs continue to rise at around 10% per year.”

Over the course of the year, car insurance premiums rose by an average of 7.7%. While the increase will not be welcomed by drivers, it is the smallest 12-month rise since 2008.

 “We are already beginning to see the number of uninsured drivers coming down due to better police detection and the introduction of Continuous Insurance Enforcement legislation last year,” added Mr Douglas.

“In addition, insurers are getting smarter at dealing with and exchanging information about fraud, while the new police Insurance Fraud Enforcement Unit is making significant progress in tackling major insurance fraud such as cash-for-crash scams and ghost broking.”

The drop will be good news for motorists, who have experienced sharp increases in car insurance in recent years. Compare car insurance policies with Propertywide.

Posted by: WarrenWilson Categories: Finance Tags: Comments Off on Quarterly fall in car insurance premiums

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