Motor Insurance prices begin to drop

MCE Insurance

The AA has done a recent survey into the price of motor insurance and has found that the average cost has fallen by 4.1% in the last year.

They say that competition among insurers and recent changes to the law have created this drop in premiums. More reforms are planned and the AA say prices could drop further still.

The changes to the law that have brought this about are most likely the controls that have been placed on personal injury claims. On 1st April there was a ban brought into force on referral fees, which are paid by claims management firms and lawyers to breakdown firms, brokers and the insurers themselves - in exchange for providing information about accident victims. The government has also clamped down on legal fees.

Aviva, the UK's largest insurer, has called for further reforms, saying that a whiplash claimant should go direct to the other driver's insurer rather than through a claims company. They say this could bring motorists premiums down by up to £60.

All this is good news for customers and the AA's survey says that the average premium among the cheapest deals now stands at £746.75.

Quotes and figures taken from BBC News

30.04.13 - James Davey

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