- UK motorists paid on average £478 for car cover in the first quarter of the year
- That’s £13 less than previous quarter but still £14 higher than Q1 last year
- That’s also highest quarterly figure on ABI records
The price of annual car cover has fallen for the first time in two years as insurers are apparently responding to changes to the way whiplash and compensation claim are calculated, a new report has found.
UK motorists paid on average £478 for car cover in the first quarter of the year – £13 less than they did in the last three months of 2017, according to figures by the Association of British Insurers.
But despite this being the first price fall in two years, car cover is still £14 more expensive than on the same quarter last year and the highest on ABI records for any first quarter.
Car insurance: UK motorists paid on average £478 for car cover in the first quarter of the year
The price of motor insurance is subject to seasonal trends and average motor insurance premiums usually fall in the first quarter of the year due to the new car registrations in March, which leads to more demand for motor insurance and more competition, the industry association said.
However, it also said that changes to the way injury compensation is calculated and the introduction of a new civil liability bill in March may also have contributed to a more pronounced fall in the quarter.
Rob Cummings, the ABI’s assistant director, head of motor and liability, said: ‘While this small fall in the last few months gives some relief to motorists, it is in line with seasonal trends and the underlying cost pressures from things like personal injury claims remain.’
He continued: ‘The Civil Liability Bill now going through Parliament will fix a broken system and help millions of motorists whose premiums had been going up and up over the last two years.’
ABI’s index, which measures prices consumers pay for their motor insurance, rather than quotes, add to similar figures by comparison website Confused.com, which also recorded a fall in car insurance prices.
It comes as the Minister of Justice, unveiling a new civil liability bill in March, said it would set a fixed amount of compensation for whiplash claims and require medical evidence before such claims can be settled.
It also confirmed plans to reverse last year’s changes to the Ogden rate – which is used to calculate injury compensation – after hearing insurers’ complaints that victims were being overcompensated.
These policies still need to be passed in Parliament and won’t be enforced until 2019.
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