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Car insurance premiums continue to fall
The cost of car insurance is falling, according to the latest data from the AA’s British Insurance Premium Index.
The index is an average of the cheapest five premiums from policies sold directly by insurance companies, taking in different ‘customer’ risks. The results highlight that over the third quarter of 2012, the average quoted cost of car insurance fell by 2.9% to £844.
The outcome was the same for price comparison sites, with the same sample customers recording an average reduction in premiums of 1% (£612) and a 2.3% drop over 12 months.
Car insurance has been the subject of government attention for a while now, and next year, legal reforms to the insurance trade are expected to reduce the cost of premiums by clamping down on fraudulent personal injury claims.
False claims are a huge driver in insurance rates as underwriters need to recoup the cost of spurious personal injury payouts somehow – the average small injury claim – including whiplash – is £8,400 and costs the industry an estimated £400 million per year.
Director of AA Insurance, Simon Douglas said: “The days of ‘open season’ for fraudulent injury claims, cash for crash and similar schemes are numbered.”
Despite a decline in costs to cover your car, the imminent introduction of a gender equality ruling will see increasing insurance premiums for female drivers.
Many women motorists currently pay less for their insurance than men, especially newly qualified or young drivers between the age of 17 and 25. However, from the 21st December 2012 a European court of justice ruling comes into force dictating a gender-neutral pricing structure.
According to Douglas, “this will affect young female drivers most, who could see premiums rise by as much as 25%.”
Only weeks away from the deadline, female drivers aged between 17 and 22 are still paying up to £500 less for their cover.
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