Car insurance providers have been involved in a price war in an effort to pull drivers toward their products. According to AA, the average cost of a year’s comprehensive coverage is £533 which is a reduction of 14.1% from last year’s £621. The last three months have resulted in a decline of 4.6% in the cost of coverage. Declines in car insurance premiums are the result of efforts to decrease false claims of which many are bogus whiplash claims.
The AA Insurance Premium Index published annually revealed that London drivers pay the most in car insurance while Scotland drivers are offered the cheapest car insurance rates.
Young drivers have also benefitted from the declines in car insurance with those aged 17-22 years old experiencing an average decline of 5.4% in the last three months as comprehensive coverage for a year fell to an average of £1,187. Senior drivers averaged a decline of 4.1% in their car insurance quotes. AA averages are found by averaging the lowest five quotes found on the market.
While currently better rates are to be found in comparison to a year ago, the competition will likely soon level out.
Simon Douglas, director of AA Insurance remarked, “It’s as if premiums are on a helter-skelter slide. I fear that the downward spiral will end with a bump. And while I expect the falls to continue at a slower rate over the first quarter of this year, I think they will then level off. But my biggest fear is that if the falls are too great, premiums will bounce sharply up again later in the year. That would not be good for the reputation of the industry.”
Experts have long encouraged drivers to shop around when renewal time occurs. This would especially be true for those that bought their current policy in the last few years for they are paying rates that were quoted during peak pricing periods. Telematics car insurance is a good place to start for those looking for quality coverage at a more affordable rate, including young drivers that will find the product especially beneficial.