Car insurance premiums fall, says MoneySuperMarket
Car insurance premiums are falling, and the growing availability and uptake of black box or telematics insurance is a major factor.
That’s according to MoneySuperMarket. Its analysis of quotes shows that between July and September this year, the average comprehensive car insurance price was £459, or 5 percent less than the same period in 2018, when it was £483.
It is the first time since 2015 that the average price of a policy has been under £480 for three successive quarters. Premiums also fell by 2.75 percent in the third quarter compared with the previous quarter.
The cost of car insurance has fallen in part because of the growing availability and uptake of black box or telematics insurance, says MoneySuperMarket. This allows drivers to demonstrate their driving behaviour to their insurer. Because it encourages safer driving, it has helped keep a lid on premiums, especially for younger motorists.
Improved safety on the roads, driven by technology, and well as a decline in the number of new cars being purchased – which typically command higher premiums – may also be helping suppress premium inflation.
However, motorists may not be able to breathe easy for long, as there are signs prices are starting to move upwards again. MoneySuperMarket points to a trend of cars becoming increasingly expensive to repair, inflating the size of the average claim and squeezing insurers’ margins.
Until recently, falling premiums have been driven by the government changing its calculations for personal injury compensation payments. In March 2017, insurers were initially forced to increase their prices to help fund larger pay-outs to victims. In September the same year, the government announced it was reviewing this decision – but in July 2019, the expected revision was significantly less than insurers had hoped, which has led to some pricing instability over the summer months.
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