Car Insurance Costs
Car Insurance costs reduced!
Recent figures that have been revealed as part of the British Insurance Premium Index study from the AA indicates that car insurance now costs £106 less on average, than it did this time last year.
The average price for a fully comp insurance policy stood at £531 for the first quarter of the year, which was down from £637, which marks a record decline of 16.6% in prices over quarter one last year.
This BIPI study analyses figures that have been collected from insurance brokers, along with price comparison websites, which gives it the shop around premium. This premium is a combination average of the five cheapest insurance quotes from both the brokers and companies and the price comparison site market.
The results from quarter one found that even in comparison to quarter four of last year, that insurance premiums had actually dropped by 5%, which equates to around £31.
The reasons behind this dramatic drop in premiums for car insurance is apparently due to tighter laws that drivers now face surrounding personal injury claims and whiplash after an accident.
The director of AA insurance Simon Douglas recently explained that fraud usually adds around £50 to each car insurance policy and eventually will lead to a rise in premiums. Though intervention from the government to toughen up legal processes in these instances further, could help prices to lower.
The AA also allegedly believes that a price war between large insurance brokers is also driving premiums down, as car insurers are looking to take more business on to sustain strategies in the economy, that has only just been through a recession.
This data also indicated that insurance prices for third party, fire and theft had decreased at a higher rate than fully comp insurance coverage, with premiums down by 18.5% in comparison to last year. That is a change from an £890 average to a £725 one, which means a saving of £165.
Young drivers appeared to have benefited the most from these tighter whiplash controls, with drivers between 17 and 22 experiencing the biggest price reductions in premiums.
This 20.5% decrease means that the average fully comp car insurance premium for brand new drivers is £1,158 in comparison to 1,457 last year.
Elderly drivers were the group least affected, with people who are older than 70 paying an average of £366, which is a drop of 7.1% in comparison to figures from 2013, a saving of £28.