Improvements in fraud detection have sent the cost of the UK car insurance in tumbling, according to the insurance arm of the Automobile Association (AA).
The average annual comprehensive car insurance quote has dropped to £594.84 this month from £659.53 in July last year, a 9.8% fall. This is the biggest fall since the inception of the AA Insurance index in 1994. Premiums, however, remain higher than six years ago. Insurers previously faced “a fast-widening gap between premium income and claims costs – largely driven by whiplash injury claims and fraud, which saw very sharp premium increases between 2009 and 2011.
“That gap is closing and premiums are falling again thanks to competition, as well as improved fraud detection by the insurance industry and tightening of the law that is beginning to curb the number of spurious new whiplash injury claims,” AA Insurance director Simon Douglas said.
Between April and July this year, the AA report said, the cost of comprehensive insurance had fallen by 3% and third party – the legal minimum – by 2.2%
Uncontested personal injury claims can now use faster out-of-court Claims Portal
The online platform, which was introduced for low value road accident injury claims in 2010, should now be used for uncontested claims of up to £25,000 covered by employer liability or public liability. It now also covers road accident injury claims of up to £25,000, up from the previous maximum of £10,000.
Extending the remit of the Claims Portal is one of a number of changes introduced by the Government to tackle the “compensation culture” and escalating insurance premiums, the Ministry of Justice (MoJ) said. It follows changes to the laws governing so-called ‘no win, no fee’ arrangements and the ban on referral fees paid between lawyers, insurers, claims firms and others introduced in April by the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO).
More car accident damaged cars than ever on UK roads
Thousands of motorists are driving potentially dangerous cars as the number of vehicles on the road that have previously been written off increases. The National Association of Bodyshops (NAB) has previously called on the Competition Commission to review their position on write-offs during an investigation into the private motor insurance market.