Although prices have dropped in the last three years following a crackdown on fake whiplash claims and repair bills, the AA says that the cost of annual comprehensive car insurance had risen by 0.2 per cent to £540 in the final three months of 2014.
Drivers have been benefiting from cheaper insurance costs and reduced prices at the petrol pumps after a survey showed premiums are down by 10 per cent on a year ago.
The AA warned that things could be set to change and AA Insurance managing director Janet Connor told The Independent that some insurers may have lost business by increasing premiums, leading to a ‘year-end sale’ to boost market share, so car insurance is still very good value.
“Nevertheless the underlying trend is upward, although I think premiums will struggle to rise past 10 per cent by the end of the year,” she said.
The AA believes that the number of personal injury claims is now higher than before recent reforms by the Ministry of Justice were introduced to cut such false and exaggerated claims.
Over the 12 months to the end of March 2014, the average number of claims was 66,000 per month but they now stand at an average of nearly 71,000 per month.
Ms Connor has welcomed the Government’s next set of proposals which will ban personal injury claims being settled without a medical assessment taking place.
“This would put off those looking for an easy cash win but would not discourage those with a genuine injury.”
Last September the competition regulator the Competition and Markets Authority (CMA) said it would ban exclusive pricing deals between motor insurers and price comparison websites.
The AA also found that home insurance premiums were largely unchanged, with the annual cost of a policy for buildings and contents rising just 5p over the last three months to £163.06.
The insurer said home premiums have fallen 5.3 per cent on a year ago, adding that prices were close to 20-year lows after levelling off from a long-term downward trend.
Click here for information about Lexelle’s range of added value products which provide enhanced levels of cover for existing motor insurance policy holders.