Car Insurance Premiums Take A Breather, But It’s Only Temporary

According to the latest benchmark AA British Insurance Premium Index, which tracks the movement of both home and car insurance premiums every quarter, the average quoted premium for a comprehensive car insurance policy fall by 3.2 per cent.

Simon Douglas, director of AA Insurance, says that while the sudden stall in the upward premium trend is a surprise he points out that a respite of this sort isn’t uncommon during the first quarter. He said “Most years we have seen insurers hold their premiums during the first quarter of the year, when there is greatest competition for business. It’s when most cars are sold and historically, it’s when most car policies are renewed.”

The Shoparound index, which is closer to the premiums customers can expect to pay if they shop around, showed modest rises over the first quarter, suggesting that the cheapest premiums on the market are continuing to increase faster.

Comparison sites such as Quotezone, Gocompare or Confused.com can help you compare car insurance quotes and help you ensure you get the cover you need at the best price.

Douglas believes that after the first quarter, premiums will resume their upward trend and expects premiums over the next two quarters to show significant rises taking increases into double digits by the end of the year.

He said “Insurers no longer have reserves on which to call in order to keep premium rises in check. The same pressures as last year continue to force insurers to increase premiums: fraud and personal injury claims especially remain a significant concern.”

Despite the respite, car insurance premiums have risen by more than 13% since this time last year.

As Lee Griffin, business development director at Gocompare.com, comments, “”Alarm bells should be ringing when the car insurance renewal quote drops through the letter box this year. Don’t be fooled by any respite in premium increases.

“When premiums are rising it is more important than ever to check what other insurers could offer you. If you happen to be with the wrong insurer at the moment, you could be facing a hefty rise. It is often possible to get very similar cover for a much lower rate simply because each insurer will have a very different view of you as a risk and some insurers will not have increased their rates as much as others.”