Relief for drivers as premiums drop
The Association of British Insurers' (ABI) latest Motor Premium Tracker, reveals that the average price paid for comprehensive motor insurance has fallen for a third consecutive quarter.
However, the ABI warns that lower insurance costs can only be sustained if the Government does not raise Insurance Premium Tax in the next budget and implements the Civil Liability Bill (and the proposed increase in the Small Claims Track limit to £5,000) in full to reform the UK's broken compensation system.
The ABI's Premium Tracker is the only study which measures the price that consumers pay for their motor cover, rather than quotes.
The figures reveal that:
• The average price for comprehensive motor insurance in the third quarter of this year was £471, down from £477 in the previous quarter (representing a one per cent drop).
• This is the third consecutive quarter fall in price and represents a £14 (three per cent) decrease year-on-year – a drop not seen in the UK motor insurance market since 2014.
The continued drop in motor premiums may in part reflect insurers reacting to the progress of the Civil Liability Bill through Parliament. The Bill, and the proposed increase in the Small Claims Track limit, seeks to reform the current personal injury compensation system, tackling frivolous whiplash claims and ensuring genuine claimants receive the best possible outcome after an accident.
The ABI has warned that, to maximise cost benefits for consumers, these reforms must be implemented in full without further watering down if the Government's stated aims are to be achieved. In particular, the Small Claims Track (SCT) limit, which sets the level at which a person can settle a low value dispute in a simple and more informal way without the need for lawyers, should be increased to £5,000. Insurers have publicly committed to passing on cost benefits to customers if the reforms are implemented in full.
Rob Cummings, head of motor & liability at the Association of British Insurers, said, 'Motor premiums dropping for a third consecutive quarter is great news for motorists, but lower insurance costs will only last if the Government implements their personal injury compensation reforms in full and leaves Insurance Premium Tax alone.
'Insurers are committed to passing on cost benefits of the reforms to consumers – it is now down to Parliament pass the much needed reforms within the Civil Liability Bill in full and for the Government to increase the Small Claims Track limit to £5,000.'