The AA British Insurance Premium is the go-to source for the average price of a car insurance policy in the UK. The latest instalment shows that premiums have risen again after two stagnant quarters – unless you use a comparison website.
The Shoparound index - an average of the cheapest five premiums from directly sold policies for each imaginary customer in a nationwide ‘basket’ of risks - suggests that over the second quarter the average cost of an annual comprehensive car insurance policy rose by 4.3% to £1,034; an increase of 8.5% over 12 months.
But for customers who used a comparison site – such as the handsome example of one you’re looking at right now - this trend is reversed. Using the same ‘basket of risk’s on price comparison sites suggests that the average premium has fallen by 0.9% to £631; a drop of 3.3% over the year.
Young drivers are, as usual, bearing the brunt of the price rises. For young drivers, the story is even worse – the premiums of young men (aged 17-22) rose by 7.5% to £2,792, while premiums increased for women in the same age group by 6.5% to £1,995, which could point to more young motorists using telematics-based insurance products.
Simon Douglas, director of AA Insurance, says that the insurance market ‘is in turmoil' at present, with some insurers increasing premiums while others are cutting prices to increase their customer base. "While this is great news for consumers, they need to make sure they're getting good cover, not just a good price.
"Insurers are still handling excessive numbers of costly whiplash injury claims as well as fraudulent ‘cash for crash' claims and ‘ghost' broking set-ups, who sell seemingly valid insurance policies using false information. However, significant inroads are being made by insurance fraud specialists including the new police Insurance Fraud Enforcement Unit, which has already smashed a number of insurance scams.”
Last week, Gocompare.com News had a look at the five factors making car insurance more expensive.