Car Insurance Costs Are Falling – But Only By a Fiver

The average price paid for comprehensive motor insurance in the second quarter of the year dipped for the second successive quarter according to the ABI’s latest Motor Insurance Premium Tracker out yesterday.

The ABI’s Premium Tracker – the only market survey which measures prices consumers pay for their motor cover, rather than quotes  –  shows that in the second quarter of 2018:

• The average price paid for comprehensive insurance was £475, down £3 (1%) on the first quarter. This is the second successive quarter that the average premium has fallen.
• The average premium of £475 was down £5 on the same quarter last year. This is the first year-on-year fall between quarters since Q3, 2014.

This reduction may show that some insurers are starting to pass on expected cost benefits from the Government’s planned reforms to personal injury compensation. However, the ABI warns that the expected benefits of lower premiums requires the reforms to be implemented as a package, especially raising the small claims limit to £5,000, and not watered down when they reach the House of Commons in September.

Leaders of insurance companies representing 93% of the motor insurance market underwritten by ABI members have publicly committed to passing on cost benefits to customers if the reforms are implemented in full: https://www.abi.org.uk/globalassets/files/subject/public/personal-injury/ceo-letter-on-civil-liability-bill.pdf

Rob Cummings, Assistant Director, Head of Motor and Liability, Association of British Insurers, said;

“It is positive for customers that they are already starting to see the benefits of the planned reforms, but lower insurance costs can only be sustained if Parliament follow through and fix our broken compensation system.

“Insurers have a track record of passing on savings, as they did when the original personal injury reforms were introduced back in 2013, before their impact waned as some claimant lawyers and claims management firms found ways to exploit the system. This is why implementing in full the reforms of The Civil Liability Bill, especially increasing the small claims track limit to £5,000, represents a last chance saloon to strike a fairer compensation system for motorists, claimants and compensators.”