It seems that car insurance rates have finally stopped rising, according to the recently revealed research findings of a survey conducted by the AA that indicated that car insurance companies keen to remain competitive have taken steps to infuse the market with more affordable cover.
While there are other surveys that indicate otherwise, such as the Towers Watson survey that says the average price of comprehensive cover in the UK is only £816, the AA’s most recent survey found that this average is closer to £1,500 a year. While this may seem to be bad news for many, the good news is that this figure has remained the same since this past January and indicates only a 3 per cent increase over the past 12 months.
Insurers have been much less reticent to raise rates in years past, as AA figures say that between 2010 and 2011, providers hiked rates as much as 40 per cent in order to recover the costs of surging personal injury compensation claims. Since then, the Government has been taking an active role in discouraging claims increases by moving forward with plans to bar lawyers looking to purchase the personal details of accident victims from insurers in order to encourage these victim to bring expensive lawsuits.
While these changes would benefit the industry by reducing claims costs, the AA added that the cost of an insurer doing business continues to rise by about 10 per cent on an annual basis. This will lead the industry as a whole to continue to institute price increases in an effort to keep up with their outgoings, the motoring organisation added.