What is happening?
More good news, and particularly for younger drivers this morning as the average cost of comprehensive motor insurance policies in the UK has fallen for the tenth consecutive quarter.
Prices for new policies have fallen by an average of 2.8% between March and June 2014 – an average comprehensive policy was around £596 in quarter one and now stands at around £579 making the average saving £17.
Younger drivers have benefitted the most after a reduction in premiums for 20 year olds being cut by 4.8% and by over 10% for 18 year old in just a three-month time span.
When it comes to third party, fire and theft insurance policies, the quarterly reductions came in at 0.3% but when taking into account the last 12 months, this still adds up to a reduction of nearly 14%.
This information comes courtesy of the latest car insurance Price Index from Confused/Towers Watson.
“This is a record 10th consecutive quarter in which prices have fallen overall even though some parts of the motoring population may not have shared in the latest reductions,” explains Towers Watson UK P&C pricing head, Stephen Watson. “What it shows in particular is that the UK motor market is still competing and innovating hard in the younger driver segment.”
When it comes to the recent legal reforms of whiplash and small claims, Jones explains that it has come to late to make any impact the quarter two prince index:
“The publication of reports by both the Competition and Markets Authority on insurance repair costs and by the Transport Select Committee on whiplash and small claims have come too late to have much, if any, effect on this latest quarter, but it will be interesting to see if the proposals they contained influence insurers’ actions over the next quarter,” Jones said.
So what does this mean for drivers?
This news will certainly go down well with younger drivers – year on year price cuts of 32.2% – that’s nearly £1,000. However, although younger drivers seem to have gained the most in terms of money saving, this downwards trend can’t be expected to continue every year.
“While it is great news for consumers that premiums are continuing to fall, these on-going drops in car insurance prices are unlikely to be sustained. “ says head of car insurance of Confused.com Gemma Stanbury. “We’ve seen premiums reduce continuously over the last couple of years, so motorists should not necessarily expect prices to continue dropping at this rate.”
Are you a young driver? Have these price cuts made a big difference in your area of the UK? Or are you still seeing premiums rising?
Do you think the crackdown on whiplash and small claims will make a difference in the next quarter making insurance premiums go back on the rise?
Whatever your experience, share it with New Look Loans!