Motor insurance 'has not risen because of flooding'
Published On 2 October 2007
Motor insurance premiums have not been hit because of the floods which devastated much of the UK this summer, a new report shows.Some experts had feared that premiums for car insurance would increase as companies looked to recoup loses from other insurance claims.
However, Experian's latest Motor Insurance Benchmark showed that average quote for comprehensive cover in the direct market only rose 0.8 per cent in the quarter after the floods.
Average premiums rose to £567.30 in July, August and September - compared to £562.70 in the previous three months.
However, the study did show that insurance premiums from brokers increased in July. Fully comprehensive car cover from a broker jumped from £495 in June to £538 in July.
David Murby, managing director of Experian's insurance service division, explained that broker premiums had not risen as a result of the flooding.
"The broker market tends to react slower than the direct market to events such as flooding, so the increases we are seeing now are highly likely to have been pending prior to the floods," he explained.
"The true impact of the floods is likely to manifest itself in insurance premiums over the next few months in the direct market once claims have been settled and insurers have been able to assess the real impact. The broker market is likely to follow suit."
The Association of British Insurers (ABI) estimates that the total cost of this summer's floods will exceed £3 billion.
