Published: Mon, April 16, 2018
Finance | By Claude Patterson

Vehicle insurance costs down but drivers don't see any savings

Vehicle insurance costs down but drivers don't see any savings

If new vehicle insurance premiums figures are anything to go by, then it looks like it's good news all-round in the United Kingdom - with consumers seeing the first annual fall in prices in three years, as well as the cost of comprehensive cover dropping quarter-on-quarter among all regions and age groups. Overall, men pay approximately £95 more than women.

As usual, the biggest premium is paid by male drivers aged between 17 and 20 - £2,348 on average, compared to the £1,699 paid by their female counterparts.

According to Willis Towers Watson, the reduced prices this quarter continue to reflect the perceived uplift in market prospects shared by motor insurers in response to proposed government action to tackle the extent of exaggerated low value personal injury claims and reform to the personal injury discount rate.

The drop in premium costs could be attributed to insurance providers reacting to the Government's reforms on whiplash claims, The Guardian says. "The government has also announced a reform to the way whiplash claims are calculated and paid, which may have also had an impact", it said.

The Ogden rate is a formula used to calculate compensation for accidents, and a new rate proposed by the government past year sparked outrage among insurers and threats of huge premium increases.

The price comparison site's vehicle insurance price index for the first three months of 2018 revealed the 2% percent fall, with United Kingdom drivers now paying £768 on average for an annual auto insurance policy. In September previous year, the government backtracked after the insurers said the new formula would overcompensate crash victims. The cheapest place for motor insurance in the United Kingdom is Dorchester where drivers were paying an average of £533 in the last three months.

Aside from analysis of the market, Confused also faced another problem: lower prices surely means people need to do less shopping around and - this is where it gets awkward - less scouting of comparison sites?

"The significance of these announcements can be seen within the last three months (Q1 2018) especially, as Confused.com's index reveals prices typically dropped by £59 (-7%)".

In Scotland, premiums are also still increasing, with motorists in the Scottish Borders area suffering the largest increase (6%) since past year.

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