Car Insurance Premiums in Record Fall
posted on Jan 30 2014 by Jade Hensby
Car insurance premiums are falling at a record rate with prices down by nearly £90 in the past year, amid a crackdown on fraudulent whiplash claims, according to a new report.
The average price of comprehensive premiums on the AA’s British Insurance Premium Index fell by 14.1% last year and 4.6% from October to December.
“Shoparound” quotes, an average of the five cheapest premiums found on both price comparison sites and the direct/broker market fell from £621 in January 2013 to £559 this month, according to the AA. The annual fall was the greatest since the AA began its insurance index in 1994.
Simon Douglas, director of AA Insurance said “these record falls come despite continuing rises in the cost of personal injury claims and reinsurance costs. The falls are a combination of both the fiercely competitive nature of the market as well as the unfulfilled anticipation that law changes will weed out costly fraudulent whiplash injury claims”.
Ministers have began to crackdown on fraudulent claims in recent years following concerns Britain was becoming the whiplash capital of Europe, but court awards for those injured in car crashes have increased in recent years.
Mr Douglas has said that his “biggest fear is that the falls are too great, premiums will bounce sharply up again later in the year. That would not be good for the reputation of the industry. It would confound ministers who have been taking some of the credit for falling premiums. And it will perplex drivers who thought that premiums were returning to a more realistic level”.