Competition Driving Rates Lower, New Laws in 2013 May Shake Premiums Up
San Francisco, CA -- (SBWIRE) -- 11/02/2012 -- Car insurance premiums have dropped relative to last quarter while premiums have been rising for the last few years, according to the AA motor-organization. A new report says that premiums finally flattened out in cost earlier in the year, and have actually started to drop.
The AA report showed that the least-expensive coverage available dropped by nearly 3%, down to £870 per year. Prices found via cost-comparison internet sites also dropped by 1%, down to an average of £612 per annum. The data showed that policy prices, while still marginally less-expensive than earlier in the year, were still 6% costlier than those purchased last year.
AA spokesperson Simon Douglas claimed that increasingly stiff competition for customers was responsible for driving costs down in the last quarter. This was true even though insurance claim costs are still getting higher:
"Competition is tough in the insurance market, forcing many companies to reduce premiums despite the fact that costs show little sign of abating,” said Douglas.
Changes for the industry are coming in the next few months will serve to shake up the market even more.
Starting December 21, insurers will be barred from extending cheaper premiums to female drivers. The new law followed a decision by the European Court of Justice, rendered last March, that is was no longer legal for insurance agencies to modify premiums based on gender.
Industry experts expect insurance rates on young female drivers to rise by 25% and catching up in cost with men. Some analysts expect the premiums may rise even higher, perhaps as much as 50%, which may cause some insurers to simply cease insuring female drivers completely.
A separate law will hit the books in April of next year. The law will bar the common industry practice from selling insured drivers information to claim-management firms when drivers are involved in accidents.
Another law slated to begin next year will make changes to existing law so fraudulent claims of ‘whiplash’ are easier to identify and dismiss.
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