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Car insurance premiums fall for first time in three years

Car insurance premiums fell by 7% in the first quarter of 2018 following government changes to the way insurers calculate compensation for personal injuries.

16 APRIL 2018 | CHRIS SEEKINGS
Prices fall for car insurance ©iStock
Prices fall for car insurance ©iStock

This represents the biggest quarterly decrease in four years and is the first time prices have fallen since 2015, with UK motorists now paying an average of £768 for cover.

That is according to research by Confused.com, which said the lower prices reflect an optimistic outlook for insurers following changes to the discount rate and a crackdown on whiplash claims.

“Insurers feel confident in calming their premiums, and our quotes data shows prices are down annually for the first time in three years,” Confused.com head of data insight, Steve Fletcher, said.

“In all likelihood we’re embarking on a downward trajectory, at least in the short-term. If historic trends are anything to go by, we expect when prices do start to go up again it will be from a higher base.”

It was found that car insurance premiums are 2% cheaper now than they were this time last year, with motorists paying an average of £13 less for cover.

Drivers in the City of London benefited from the greatest quarterly fall of 21%, with East London now the most expensive location in the country for car insurance, and Dorchester the cheapest.

Prices decreased across all regions, with drivers in North West England best off after experiencing a 9% cut to premiums, followed by those in the North Midlands and North/North East Scotland were they fell by 8%.

Similarly, prices decreased across all age groups, with drivers aged 27 benefiting from the largest quarterly cut in premiums at 11%, while 68-year-old motorists experienced the smallest drop at 3%.

“The industry clearly expects the new Civil Liability Bill to lead to a positive discount rate, and these cost benefits are being passed through to consumers,” said Stephen Jones, UK head of P&C pricing at Willis Towers Watson, which helped with the research.

“There are a number of hurdles that will need to be cleared before a new discount rate comes into effect, expected in April 2019, however, the outlook for consumers is far more positive.”


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