Figures compiled from the Association of British Insurers show that it’s not just the price of petrol that has been dropping over the last few years.
ABI suggest that insurance prices may have fallen up to 5% compared to the end of 2013, and the average cost of a policy is around £370.
ABI have attributed the drop in part, to increased competition in the insurance market. With greater competition, companies have had to start dropping prices of policies and premiums in order to either gain new market share, or retain existing customers. The reduction in lawyer fees and increase in legal aid have also been part of the drop.
There has also been much speculation over the past few months, as to how the insurance industry would react to falling petrol prices and more drivers being out on the road. Another factor has been the increasingly warm and gentle weather, with a very mild winter. This led to a decrease in the number of motor based claims which in turn has been decisive in driving down the price of insurance premiums.
There is hope that prices could fall even further, as new legislation is being discussed to reduce the incidence of false whiplash claims. This is a problem that affects almost everyone, as when one person claims, premiums are subtly affected. Due to the high numbers of false claimants, this effect has multiplied into a very real effect on prices.
New legislation that will use medical understanding to ascertain the validity of claims, has been strongly applauded by insurance companies, and they say the public should be happy about it too.
These reductions are a welcome sight, but experts are still advising that the best way to cut insurance prices is to shop around, find the best deal for you and look carefully at the small print of contracts.
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