Small drop in car insurance premiums
April 12, 2007 by admin
Filed under News, News-Insurance
Despite a small dip in the last quarter, car insurance premiums remain high, new research shows.
Drivers taking out comprehensive insurance faced an average annual bill of £802, according to the AA’s benchmark British Insurance Premium Index.
Although this represents a £4 dip in yearly costs from the previous figures, it was falling from an all-time high after prices rocketed 4.35 per cent in the three months to the end of 2006.
Commenting on the results, Kevin Sinclair, managing director of AA Insurance, expressed surprise that premiums had dropped, saying: “I had expected premiums to continue rising and I think the underlying pressure is still upward.
“Most insurers continued to apply small increases in an effort to close the gap between premium income and claims costs.”
Third-party, fire and theft (TPFT) insurance saw a slightly higher drop in annual premiums to £993 at the start of the year, equivalent to a £6 saving.
But Mr Sinclair also doubted whether this downward trend would continue as most TPFT cover is bought by young people, who represent a five-time greater risk to insurers due to the higher accident rate among people under 21.
