Average car insurance premiums fall slightly
Published On 10 April 2007
The average cost of car insurance has fallen slightly from the high it reached at the end of 2006, new data shows.According to the AA, a typical annual car insurance premium now comes in at £802 - £4 less than the record breaking figure recorded in at the end of last year.
The small fall will be welcomed by motorist, who had feared another increase after premiums increased by 4.35 per cent during the final quarter of 2006.
Despite the decrease in car insurance premiums, experts expect prices to rise again in the future.
"I had expected premiums to continue rising and I think the underlying pressure is still upward," said Kevin Sinclair, managing director of AA Insurance.
"Most insurers continued to apply small increases in an effort to close the gap between premium income and claims costs.
"Some distributors – especially online providers – are taking advantage of the rising trend to offer big introductory discounts and that has checked premium averages. But there is a limit to how long they can hold back the tide."
The AA's data also showed that the average cost of home building and home content insurance remained stable at the beginning of the year.
"Insurers are concerned about the long-term effects of climate change – but it seems that in the short term mild winters are keeping claims – and thus premiums – relatively low," Mr Sinclair concluded.
