While it may seem odd to welcome the fact that car insurance companies are continuing to raise their rates, industry experts say that the relatively modest 7.1 per cent rise in the average price of insurance from March of 2011 is blessed relief for price increases experienced during the 12 months preceding that date.
The price of insurance from March 2010 to April 2011 increased by a massive 40.1 per cent, according to the research findings of the AA, leading the motoring organisation to be nearly ecstatic that prices haven’t risen at a similar rate over the most recent year. Even with the current average for an annual comprehensive policy weighing in at a hefty £1,452, the AA said that there are ways to manage the cost of your cover, as a large number of insurers are offering discount car insurance to new customers.
Simon Douglas, from the AA’s insurance division, says that marked premium increases are nearly inevitable for the future, especially as the industry’s costs as a whole increase by about 10 per cent every year. However, even in the face of such a figure, the AA found that the least expensive premiums actually declined in price by 1.1 per cent overall – though insurers do not hesitate to increase the rates of their loyal drivers at renewal time to offset these price cuts.
Mr Douglas did warn that the premium price drop is unlikely to be sustainable in the long-term, with the end result being another sharp increase in premiums such as occurred in 2009.