The average price for car insurance fell slightly in the first three months of 2013, according to the AA, but only for fully comprehensive policies as third-party cover continues to rise in price.
The motoring organisation's quarterly British insurance premium index found the average quoted premium for annual comprehensive car insurance is £747 – a fall of 1.4 per cent since the beginning of the year.
The latest fully-comprehensive insurance figure is also 4.1 per cent down on this time last year but policies covering third party, fire and theft (TPFT) have edged up, rising two per cent since the beginning of the year to just under £1,128 now - a figure which represents a 0.9 per cent rise on the average this time last year.
Small cheer: Car insurance costs fell in the last 12 months - and signs are they could fall furtherThe AA says the rise in TPFT has coincided with fewer insurers offering this type of cover at all, meaning reduced competition and incentives for providers to lower their prices.
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TPFT is often taken out by younger drivers with older cars that are worth less than the average, The AA said that it is now worth drivers checking quotes for both TPFT and comprehensive, as sometimes it can be cheaper to go down the comprehensive route.
The figures in the index are reached by taking the average of the five cheapest quotes from a range of premiums from insurers and brokers, as well as from price comparison sites, against a fixed basket of risks.
AA Insurance director Simon Douglas said the overall trend of falling prices will be welcomed by consumers who have faced some of the biggest premium increases ever recorded in the past three years.
He said: ‘Car insurance has not been far from the headlines for all the wrong reasons as insurers struggled to balance premiums against claims costs.
‘Sharp hikes in personal injury claims, fraud and uninsured drivers, to say nothing of last year's gender directive and changing regulations, have all helped to pile on the pounds.’
Scott Kelly, head of motor at gocompare.com, said: ‘There is a lot going on in the car insurance market at the moment with the after effects of the EU Gender ruling (to make pricing based on sex unlawful) 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.’
How costs have risen: The blue line shows how comprehensive car cover has risen in recent years - but have now started to slide Signs indicate premiums should continue to reverseIn 2011 - according to AA’s index - car insurance costs increased a whopping 15.3 per cent in just 12 months. So the fall of 4.1 per cent revealed today will be welcome by stretched motorists – and signals indicate costs could fall further.
The AA says various legislative moves, including a crackdown on fraudulent whiplash injury claims, should keep premiums down.
On 1 April 2013, legal reforms were introduced to control injury claim costs. The measures included banning of referral fees between claims companies, insurers and law firms, controls to manage legal costs and to ensure injury claims costs can’t be paid for compensation claims of under £5,000 in small claims courts.
Most whiplash injury compensation awards are well below £5,000.
Further measures will follow which could include independent medical assessment of those claiming whiplash injury.
Mr Douglas adds: ‘It’s shameful that 70 per cent of those in car crashes on Britain’s roads are said to make a claim for injury even if no injury has been suffered, amounting to some 570,000 claims per year, costing £2billion. In France for instance, only three per cent of crashes result in a personal injury claim.
‘Britain really is the whiplash capital of Europe.’
Next year, car insurers will in addition be able to cross-check the details of those applying for cover against their DVLA record.
A shocking 23 per cent of those filling in insurance application forms make false statements about things such as motoring offences which may lead to lower premiums.
He added: ‘That’s stealing from those who are honest in their applications. Bringing this under control will help bring premiums down further.’
