UK car insurance premiums dropHard-pressed motorists have recently had some good news in the shape of the government's announcement that fuel tax increases are to be shelved for the foreseeable future. Drivers of hybrid cars and frugal little city cars have also been cheered by news that the government is set to extend its incentives for the most fuel efficient vehicles.
Hard-pressed motorists have recently had some good news in the shape of the government's announcement that fuel tax increases are to be shelved for the foreseeable future. Drivers of hybrid cars and frugal little city cars have also been cheered by news that the government is set to extend its incentives for the most fuel efficient vehicles. Now more good news has arrived in the shape of a drop in average car insurance premiums. According to a new survey by the AA, the cost of a typical car insurance policy has dropped by around 4.1% over the past year.
Figures show that premiums for the most competitive insurance deals dropped by 1.4% in the first three months of 2013 alone. Industry observers put the fall down to changes in law which came into place over the last year, with increasing competition among large insurers also helping to reduce prices. The AA also said that it expected car insurance premiums to continue to fall as new industry reforms are put in place. The AA's 'Insurance Shoparound' survey creates a standard set of risks and works out an average premium from the five cheapest quotes it gets from both direct insurers and price comparison sites.
Over the previous three years, insurance premiums were shown to be rising steadily but this last year has seen a fall in prices. The Insurance Shoparound survey found that the average premium for the cheapest deals was £746.75. The AA explained that the key to falling premiums was controlling personal injury claims. At the beginning of April this year, a ban was introduced on so-called referral fees which in the past have been paid out by lawyers and claims management companies to breakdown organisations and brokers in return for details on accident victims. The government has also introduced a cap on legal fees.
Leading insurance company Aviva has asked for the reforms to be widened. It has suggested that those claiming whiplash injuries are forced to claim directly from the other driver's insurance company. The insurance giant reckons that this measure alone would cut car insurance premiums by an average of £60 per annum. Whiplash claims have grown over the past few years to become a major cause of rising premiums. Such claims now account for some 80% of personal injury claims with most of the cases involving lawyers. Aviva said that such claims added an average of £118 to annual insurance premiums.
Posted by Edwin Miles on