AA says car insurance premiums cheaper than they were a year ago
Car insurance premiums are cheaper than they were one year ago while premiums for combined home and contents insurance fell in the last quarter.
According to a report by break down and insurance company AA, car insurance premiums peaked during the second quarter of 2017 but have fallen steadily since then to an average premium of £660.64, which is 0.7 per cent cheaper than this time last year and two per cent cheaper than in the fourth quarter of 2017.
The AA’s director of insurance Michael Lloyd said: “This is a glimmer of good news for drivers who are facing rising fuel prices and increased vehicle excise duty rates.”
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Lloyd said that one of the reasons insurers were offering lower rates was confidence engendered by the government’s commitment to review the Ogden rate by which payouts to those injured in car accidents is calculated.
“Insurers’ confidence in offering lower quotes is boosted by the government’s Civil Liability Bill commitment to review the so-called Ogden or ‘discount rate’ which affects the value of compensation pay-outs to severely injured victims of car crashes, as well as clamp down on the whiplash claim culture,” he said.
“This particularly affects premiums for young drivers who tend to be involved in more catastrophic crashes, and pay much higher premiums, than any other age group,” he added.
He also welcome the government’s commitment in the bill to reform “compensation culture” and crack down on whiplash claims.
Read more: Insurers welcome government crackdown on whiplash claims
He said that he expects insurers, including AA, to pass on savings to drivers in the form of lower premiums.
“In the competitive car insurance market, firms including the AA, will reflect savings they make in the premiums quoted – which the Government suggests could be as much as 35 per cent,” Lloyd said.
Average home and contents insurance cover fell over the quarter but remained higher than a year previously.
The average quote for a combined buildings and contents policy increased by 4.8 per cent to £117.47 over the year, despite a small fall in the last quarter 0.4 per cent.
Lloyd said: “Despite the increases over the year home insurance remains good value. The average premium for a buildings policy is the same as it was at the beginning of 2011, but reached an all-time peak of £120.94 in the last quarter of 2011.”