Car-Insurance-UK-Supermarket.co.uk
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UK car insurance prices fell by 5% in July17 Aug 2011by Peter Tait According to recently released figures from a UK price comparison site, compared to prices from the previous month, the cost of car insurance dropped by 5% in July. Hundreds of quotes for several different driver profiles are monitored each month by the site, Tiger.co.uk, to produce an estimate of average market prices. Their figures showed that car insurance price inflation is still running at an annual rate of 17%, a significant drop from over 30% over recent months. While the AA's industry-respected quarterly Insurance Price Index (IPI) showed a 5.6% drop in car insurance prices for young drivers, the Tiger figures indicate that young women continue to see substantial increases in their premium with current annual inflation at 36%. For young women in particular, however, any slow-down in their car insurance premium inflation will be short-lived owing to the European Court of Justice ruling to abolish the use of gender to determine premiums from 21 Decemeber 2012. The British Insurance Brokers' Association (BIBA) has estimated that young women will pay 25-50% more for their car insurance after that date although young men will pay around 10% less. Of course, it would be unwise to read too much into a single month's drop in car insurance prices but this data and that from the AA does show that car insurance inflation is slowing down, consistent with more insurance companies reporting a return to profitability after a turbulent two to three years when major pricing adjustments became essential for the insurance industry to survive on the longer term. The last three years has seen a doubling of the price of car insurance, much of which has been attributed to the cost of underwriting 
spiralling personal injury claims following road traffic accidents,
coupled with their associated sizeable legal fees. Other inflationary pressures on car insurance have included reduced income from premium investment, unsustainable and loss-making price wars to compete favourably on price comparison sites, referrals to costly legal and car hire services for which liable insurers have needed to pick up the tab, avoidable tardiness from the insurers themselves in admitting liability so increasing legal costs and widespread use of inaccurate computer modelling to value claims by the industry resulting in avoidable additonal legal costs as more appropriate damages awards are pursued by claimants. The massive increase in personal injury claims has been attributed to a range of factors which have included raised awareness among the public of how to access justice, the opportunity for this to happen at zero financial risk to the claimant under no win, no fee conditonal fee agreements, the doubling of claims management companies over the last three years that capture new claimants that would not otherwise become litigants, an increase in speculative or fraudulent claims, and, some would say, an emerging 'litigation culture'. Regardless of the causes of the rising cost of car insurance, causes that the Government is attempting to address in various ways as we have reported extensively here, that there is some evidence of a drop in prices will be welcome news for cash-strapped motorists in this country. |
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