Car insurance costs fall to £430 – their lowest since 2016 | This is Money

Car insurance costs fall to £430 - their lowest since 2016 | This is Money

Car insurance premiums have reversed to £430 making them the lowest they’ve been in five years, new data from the industry body shows. 

The average cost of comprehensive motor insurance is now £30 cheaper than last summer and £44 lower than the first three months of 2020, ahead of the pandemic. 

The lower figure is also the cheapest quarterly average since the beginning of 2016, when cover typically came in at £429, according to the Association of British Insurers.

The average cost of comprehensive motor insurance is now £44 lower than before Covid

The cost of car insurance has sunk over the past year, in part due to the significant drop in car insurance claims during successive lockdowns and fewer vehicles on the roads.  The data is up until the end of June 2021.  

‘The fall in the average motor premium clearly shows that millions of drivers continue to benefit from cost savings made by insurers during the lockdowns,’ said Laura Hughes, the ABI’s manager of general insurance.

‘It will be interesting to see if there is a rise in motor claims as we emerge from the pandemic and road traffic continues to increase.’

But the frequency of claims still remained below normal levels as the pandemic has caused a permanent change in the working patterns of many people, who are no longer commuting.    

The average premium over the first six months of this year has fallen by £38 since the fourth quarter of last year, ABI said. 

It added that insurers still faced the continued cost pressures of rising repair bills. 

‘While underlying cost pressures around rising repair bills will remain, the market will stay competitive, enabling motorists to shop around for the best deal for their needs.’

The ABI’s tracker looks at the price people pay for cover rather than the price they are quoted. 

Similar recent research by Compare the Market shows a similar downward trajectory for motor insurance costs.

Direct Line, Britain’s biggest motor insurer, said yesterday that both a drop in claims and cover prices had started to stabilise during the second quarter as restrictions eased

According to its research, car insurance premiums fell by £24 since the winter to £629, while the cheapest premium also decreased to £536, dropping from £595 in the second quarter of last year. 

But the reduction in costs over the past year follows a number of years of high premiums.  

Over the past five years there have been changes to government policy which have forced premiums up, including hikes to Insurance Premium Tax, delays to the whiplash reform and changes to the Ogden rate which drove up the cost of claims.

However, the insurance industry has faced significant changes since the start of the pandemic as government restrictions have forced many cars off the roads, in turn reducing the volume of claims and pushing premiums down. 

The ABI said they would be ‘watching closely’ the impact of the new Official Injury Claims portal launched in May aimed at simplifying the whiplash claims process and ensuring proportionate compensation for genuine claimants. 

SAVE MONEY ON MOTORING

Car insurance costs fall to £430 – their lowest since 2016

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.

Add your comment

By posting your comment you agree to our house rules.

We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.

You can choose on each post whether you would like it to be posted to Facebook. Your details from Facebook will be used to provide you with tailored content, marketing and ads in line with our Privacy Policy.

This content was originally published here.

Related Articles

Responses

Your email address will not be published. Required fields are marked *

WPGrow