Car insurance news roundup: week ended 26 Sept 2012:
This past week brings what should be good news in that car insurance rates are down overall, but the bad news is that the better prices don’t seem to be for everyone.
A major car insurance comparison website recently discovered that premium prices for the UK have gone down by 10.6 per cent over the last 12 months. The more than 16 million motor car insurance quotes analysed by the site found the average premium price, which was £554 in April of last year, dropping to £478, the lowest insurance premiums have been in 18 months.
Market competition was found to be the primary driver of the price drops, according to the comparison site’s spokesman, Kevin Pratt. With just a handful of insurers looking to take on new business by offering lower premium prices than their rivals, a price war has been sparked that has seen other insurers lowering prices across the board in order to remain competitive, but there’s no indication of how long this trend will last, Mr Pratt added.
This is a far cry from earlier in 2012, when insurance industry as a whole was referred to the Competition Commission by the Office of Fair Trading, based on criticisms that included insurers charging £225 million in extra premium prices to drivers in order to recover suspiciously high costs for hire vehicles and repairs. However, there’s still some dark clouds to go with this seemingly silver lining, as independent research has discovered that these price drops are largely going to younger drivers, with older motorists being hung out to dry by their insurers.
According to research conducted by customer rights campaigner Which?, drivers between the ages of 81 and 85 are often offered sub-standard car insurance quotes. The average price of a premium for an older driver is anywhere from 50 per cent to 74 per cent more expensive than the same cover offered to Brits between the ages of 41 to 45, Which? discovered, even though these older drivers were found to be less likely to make insurance claims.