According to the AA British Insurance Premium Index, auto insurance premiums have dropped and are at their lowest levels since 2010. This as of the first quarter of 2020. The Director of AA Insurance Simon Douglas has stated the reduction is due to “price wars” and that the “unprecedented falls” in the cost of insurance could cause some insurance firms to cease trading in some of the areas of the insurance industry that are not as profitable.
Overall in speaking with various people I know, no one has stated they have received a reduction in their car insurance. It may mean the reduction is for those newly insured, not long-standing clients, or any reductions may be seen upon renewing an existing policy.
The British Insurance Premium Index showed a reduction of 16.6% in comprehensive coverage, and they also showed a 18.5% reduction in third-party fire and theft insurance. The average premium for comprehensive coverage fell to £531.24 from £636.85, and for third-party fire and theft the average premium was £725.13, down from £890.17.
One area that almost everyone agrees on that has helped reduce the cost of auto insurance is fighting fraudulent claims and the “whiplash culture”. Fraudulent claims, especially in the auto insurance side of things, costs the industry millions and millions! By reducing these types of claims, it saves the insurance industry with that savings being passed on to the insured.
Douglas also stated, “Despite this there is no evidence that this is delivering any significant reduction in the number and value of personal injury claims. It’s vitally important that the government continues to work closely with the insurance industry to bring tougher curbs to discourage whiplash injury claims, in light of a new report showing that such claims are rising.”