Insurance premium have shown a drop of 1% (£5.58) so far this year, according to the latest AA British Insurance Premium Index, but the company is predicting a rise throughout 2015.
Managing director of AA Insurance Janet Connor says that the first quarter often sees insurers offering price reductions to build market share at a time when, with the new motor registrations, more policies are sold than at other times.
However, she says the brakes are now coming and premiums are starting to rise and will continue to do so over the rest of 2015, suggesting that the cost of claims is greater than premium income.
Connor says she is hopeful that new medical reporting accreditation for whiplash injury assessment will help to curb the out-of-control claims that are now leading insurers to increase premiums.
Recent research by the AA showed that 11% of motorists say they see nothing wrong in making a claim for compensation in the event of a no-fault collision even if no injury is suffered.
“Despite the premium falls over the past couple of years, 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.
“It’s time consumers understood the connection between premiums and making fraudulent claims. Car insurance is there to protect drivers in the event of a crash, not as an opportunity to cash in. Insurance isn’t a savings account.
“My greatest fear is that if insurance fraud such as whiplash injury claims isn’t brought under control and quickly, we will see a repeat of the spiralling premiums of 2010 and 2011 when the cost of the average policy rose by over 40% in just 12 months,” Conner said.
Insurance premiums experienced a rise of 0.2% over the last quarter of 2014, and a rise of 1.2% over the three months ending September 30. Over 12 months, premiums have fallen by 5.8%.
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(average of five lowest quotes for each ‘customer’ in basket of risks)
Note: TPFT appears to have a higher premium than comprehensive because the basket of risks reflects the type of driver that buys such cover, typically young drivers.
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