Five Questions On: Car insurance

 

Simon Read
Friday 24 April 2015 19:18
Comments

Is it going up again?

Actually it's fallen. Motor premiums have dropped 1 per cent in the past three months, according to the AA. The average policy now costs £530.47.

Will they get even cheaper?

Not a chance, reckons Janet Connor, managing director of AA Insurance. "Low premiums can't last," she said this week. "We're starting to see insurers quoting higher prices and I think that's the beginning of a trend." That's because in the first quarter, insurers often offer price reductions to build market share at a time when more policies are sold.

Does that mean insurers will start cashing in again?

No, says Ms Connor, saying that for many insurers, the cost of claims is greater than premium income, which means that present motor insurance prices are unsustainable. But she also warned that premiums could spiral again unless there is a crackdown on fraudulent claims.

Are fraudulent claims a problem?

Yes, says the AA, pointing out that the cost of cover remains higher in the UK than in most other European countries thanks to the claims culture in the UK. "While the number of crashes on Britain's roads has fallen, the number of injury claims has risen," said Ms Connor, warning that consumers need to understand the connection between premiums and fraudulent claims. "Car insurance is there to protect drivers after a crash, not as an opportunity to cash in," she said.

What could happen?

If fraudulent claims for such things as bogus whiplash injuries isn't brought under control quickly, we could see a repeat of the spiralling premiums of 2010 and 2011, when the cost of the average motor policy rose by more than 40 per cent in just 12 months, the AA warns. However new medical reporting accreditation for whiplash injury assessment should help to curb the dodgy claims.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in