Impounded Car insurance reports on falling cost of seized car insurance policies
Further to our previous report here our report today continues on the topic of falling seized car insurance policies. New figures indicate that seized car insurance prices are currently down by £90 after car insurance premiums have fallen at a record rate in the past year due to a crackdown on supposed fraudulent whiplash claims. Premiums are set to continue to fall but the AA is unsure as to how long it can last.
On the AA’s British Insurance Premium Index, average comprehensive seized car insurance premiums fell by 14.1% last year and 4.6% from October to December. This annual fall is the greatest since the AA set up the index in 1994, indicating that those with cars are currently getting a real easy deal on their insurance for now.
“Shoparound” quotes – quotes made up of an average of the five cheapest seized car premiums found on both price comparison websites, along with the direct and broker market – were found to drop from £621 in January 2013 to £559 in October and £533 this month, according to figures released by the AA. These falls appear to be taking place despite the rise in cost for the AA on personal injury claims and reinsurance costs, meaning the falls are likely due to the fiercely competitive nature of the car insurance market at the moment. It’s also likely that the market’s anticipation for future legislation to render fraudulent whiplash insurance claims impossible is feeding into the currently low premiums, the laws that come in hopefully weeding out the fake cases of personal injury.
Ministers have started a crackdown on fraudulent claims of whiplash injury after Britain was slowly becoming the ‘whiplash capital of Europe,’ but in recent years, many of those claiming personal injury during car crashes have found a steady increase in the amount of court awards that are now appointed. Changes to seized insurance claims could lead to a possible further sharp decrease in premiums, suggesting they could fall too far before insurers are able to reap the benefits. In this sense, there’s a chance that seized car insurance premiums will continue to fall at an exaggerated rate until coming to an abrupt stop, as the falls will be too great for the market and premiums will have to sharply increase later on into the year. Not only would this reflect badly on the insurance industry, it would force ministers to answer why they haven’t stepped in and it would leave drivers, who believed that premiums had returned to a reasonable standard, struggling for money and untrusting of the seized car insurance industry.
