Good news, car insurance fans! The first AA Insurance Premium Index for 2013 has revealed that the average price of an annual UK car insurance policy fell by 1.4% over the first quarter of the year, and is 4.1% cheaper than the same period last year. Rejoice!
Well, perhaps not. That average figure is still pretty gosh darned expensive by anyone’s reckoning - £746.75, to be precise.
However, this rollercoaster of insurance-related emotion you’re doubtless experiencing has another twist. The experts reckon that this downward trend is set to continue thanks to some measures included in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 which came into force at the beginning of the month.
These are intended to curb the excesses of the personal injury free-for-all which the industry says is driving up the cost of car insurance for everyone.
The measures include a complete ban on the payment and receipt of referral fees for any claim that includes a personal injury, controls to ensure that costs are proportionate to the damages, a ban on ‘additional liabilities’ and solicitor success fees being claimed from the defendant in an injury claim, fixed legal fees for road collision claims under £10,000 and a limit for personal injury claims in the small claims court. Further measures are due to come in during July. So there you go.
AA director of insurance, Simon Douglas, opined: "These (measures) should go some way towards bringing no-win no-fee type whiplash injury claims under control and will thus reduce the costs of claims."
The AA claims that 570,000 personal injury claims are made every year, costing insurers £2bn.
But Scott Kelly, head of motor at Gocompare.com, has warned drivers not to get complacent. He said: “There is a lot going on in the car insurance market at the moment with the after effects of the EU gender ruling still working through renewal quotes and moves to curb the cost of personal injury claims. As a result, individual insurers will vary a good deal in the way they assess different risks.
“It is important that drivers step back and take the time to compare prices. Premiums have stopped rising but that doesn’t guarantee that everyone is suddenly getting a good deal. You don’t want to be signing up for another year with your existing insurer if they are increasing your premium when another company might have a totally different view."