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Car insurance prices still falling - but may rise again soon

By Joel Stanier

23 October2021

It may seem like everything is getting more expensive - but car insurance is one thing that is getting cheaper, according to the AA.

The car rescue and insurance provider's latest Shoparound index - which takes an average of the five cheapest insurance premiums - shows that the best-priced comprehensive car insurance policies fell by 2.9% to 844 in the third quarter of 2021.

Average insurance premiums fell in the previous quarter too, although prices are still up 5.6% on this time last year.

Simon Douglas, director of AA insurance, said that the current trend of falling prices is good news, but added that the average prices mask the fact that there is a big difference between the cheapest and the most expensive premiums.

"Competition is tough in the insurance market, forcing many companies to reduce premiums despite the fact that costs show little sign of abating. Nevertheless, some are still increasing premiums.

"Motor insurance has been a focus of Government attention for some time and next year, new legal reforms are expected to reduce the cost of personal injury claims and fraud. Whiplash injury claims continue to pour in, and under current legislation they are difficult for insurers to reject, even if they think they may be fraudulent, because it is difficult to prove whether or not a claimant has suffered."

However, it's likely that we will see increases in the coming months, when it will become illegal to price premiums based on gender. Young women's premiums have been falling in recent months - but it's thought that insurers will almost certainly raise the prices of car insurance for women when the new law comes into force.

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