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UK car insurance industry ‘in turmoil’
The car insurance market in the UK is “in turmoil”, according to an insurance industry expert.
Director of AA insurance, Simon Douglas, highlighted the state of today’s market after it was uncovered that some providers have been HIKING their prices, while others are SLASHING premiums to build up their customer base.
The AA British insurance premium index outlined the average price of the five cheapest premiums for a fully comprehensive policy sold directly has risen by 8.5%, now standing at £1,034 for 12 months cover.
Conversely, the study also found that the average cheapest quote found on the growing crop of price comparison websites for the same person wanting the same cover and exhibiting the same risk has dropped by 3.3% – just £631 by comparison.
Premium prices for men aged between 17 and 22 came in at an average of £2,792 in the second quarter of 2012, while costs for women in this age group also increase compared to last year, now at £1,995 on average.
“Competitive pressure is leading some companies to make big premium cuts on price comparison sites so that they can increase their portfolio of customers. While this is great news for consumers, they need to make sure they’re getting good cover, not just a good price,” added Douglas.
The investigation also found that significant inroads are being made to tackle fraudulent insurance claims, such as crash-for-cash scams and false whiplash claims, pushing up premiums.
Application fraud is also being targeted by insurers to cut down on the number of buyers that take out a policy, only to withhold or alter information to reduce premiums.
Plans are afoot to grant insurers routine access to DVLA data in order to more accurately cross-reference fields to clamp down on insurance fraudsters.
It was found Scotland remained the cheapest region to insure a vehicle in at an average cheapest quote of £727, while Greater Manchester and Liverpool were the most expensive localities at £1,648 on average.
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