The average cost for car insurance has now fallen to just above £350. This figure is taken from looking at all the comprehensive packages bought in the first quarter of 2015, and is the lowest it has been since quarter one of 2013.
Insurance companies are saying that one of the most significant reasons for this continual drop in price is the governmental crack down on people falsely claiming on their insurance.
Several reforms in the justice system have led to much harsher punishments for those claiming whiplash cases where there was no actual damage. This has been identified as a key factor in driving insurance prices up, and with the reforms, the numbers of false claims have been dropping.
On top of these beneficial legal advancements, the market has become far more competitive. With many homeowners looking to switch their energy providers after seeking advice to attempt to find the best deal, this approach seems also to be spreading to the car insurance industry. Customers are shopping around, finding the best deal and making good savings. Comparison websites are also proving a useful tactic, as they can provide market overviews and simplify the options.
It can be quite confusing for a first time insurance purchaser to wade through the different options and pricing systems. The comparison sites do not always necessarily give the cheapest prices, but they can help to clear up who is selling what.
Insurance companies have warned that although the initial wave of legal reforms seem to have had a strong effect, it would not be long before enthusiasm died down, and the low value claims started to rise again. The government will need to come up with a long term solution to keep the market fair and competitive in the face of this.
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