Car insurance news roundup: week ended 24 oct 2012:
The biggest news this week, according to one motoring organisation, is that car insurance rates have actually declined from their record highs for once.
It’s not quite a Christmas miracle, but it certainly feels like one: motor car insurance premium pricing fell in 2012’s third quarter, according to the AA’s most recent survey. It seems that the first half of the year was the plateau for price increases – and rather big ones at that – says the AA, and we could very well be experiencing a drop-off in the cost of insurance finally.
Prices dropped by 2.9 per cent in the third quarter of the year, with the least expensive comprehensive policies purchased directly from car insurance companies costing an average of only £870. Car insurance comparison premiums also declined to £612 on average, a drop of 1 per cent, according to the AA’s figures.
The final figures indicate that anyone shopping for insurance from a comparison website this year have benefited from slightly less prices than they would have paid in 2011. However, direct car insurance policy pricing is still up 6 per cent from 12 months ago, even with the 2.9 per cent drop.
AA Inssurance’s Simon Douglas commented on the new findings, remarking that even though claims costs are still going up, higher levels of competition between insurers is keeping prices down overall. However, with little chance of these cost increases abating any time soon, the price drop may not be sustainable in the long run.
Many industry experts say that the relative stability of the market will most likely not survive the festive season anyhow. The European Court of Justice ruling that goes into effect on 21 December of this year – the one banning insurers from using gender as a basis for determining customer risk – will see an end to cheap car insurance for women, as they will no longer benefit from their statistical likelihood of being safer drivers.