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Your support makes all the difference.Is it going up again?
Actually it's fallen. Motor premiums have dropped 1 per cent in the past three months, according to the AA. The average policy now costs £530.47.
Will they get even cheaper?
Not a chance, reckons Janet Connor, managing director of AA Insurance. "Low premiums can't last," she said this week. "We're starting to see insurers quoting higher prices and I think that's the beginning of a trend." That's because in the first quarter, insurers often offer price reductions to build market share at a time when more policies are sold.
Does that mean insurers will start cashing in again?
No, says Ms Connor, saying that for many insurers, the cost of claims is greater than premium income, which means that present motor insurance prices are unsustainable. But she also warned that premiums could spiral again unless there is a crackdown on fraudulent claims.
Are fraudulent claims a problem?
Yes, says the AA, pointing out that the cost of cover remains higher in the UK than in most other European countries thanks to the claims culture in the UK. "While the number of crashes on Britain's roads has fallen, the number of injury claims has risen," said Ms Connor, warning that consumers need to understand the connection between premiums and fraudulent claims. "Car insurance is there to protect drivers after a crash, not as an opportunity to cash in," she said.
What could happen?
If fraudulent claims for such things as bogus whiplash injuries isn't brought under control quickly, we could see a repeat of the spiralling premiums of 2010 and 2011, when the cost of the average motor policy rose by more than 40 per cent in just 12 months, the AA warns. However new medical reporting accreditation for whiplash injury assessment should help to curb the dodgy claims.
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