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Car insurance premiums drop as whiplash rules change

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Changes to the rules on whiplash claims are pushing car insurance premiums lower, finds new research from’s Premium Drivers Index.

Car insurance premiums dropped by an average of £100 between December and February following the passing of the Civil Liability Act in December.

The Act reformed the way the rate used to calculate payouts in serious personal injury claims, the ‘Ogden rate’, is set. It is expected that a review of the rate later this year could further reduce premiums. Insurers have passed on the reductions in cost straight to consumers, even though whiplash changes are not expected to be implemented until April 2020.

Although premiums always vary from month to month, the drop from December to February is around double the average. However, warned that the fall does not necessarily mean a reset of insurance costs in the coming months. Premiums increased significantly over the past few years. These changes will likely keep premiums comparatively high for the foreseeable future until any mooted reforms are implemented.

An additional factor which may have reduced premiums is the recent decline in the number of car registrations. Figures out today show a drop in the number of new cars registered. This could indicate car insurers are competing more heavily on price to keep winning customers in a shrinking market.

Dan Hutson, head of motor insurance at, said: “This is the first bit of good news for British motorists in a long time. Insurance prices have been on a relentless upwards march since 2012. A £100 drop in insurance costs between December and February indicates that a more structural reduction in premiums is taking place.

“These reductions in cost follow recent changes to the law around whiplash claims, passed in December 2018 and due to come into force next year. This is also likely aided by the reduction in the number of car registrations in the past six months, which suggests that insurers are having to compete more to win a larger share of a smaller market. With the review of the Ogden personal injury discount rate now under way, there is hope for motorists keen to see further reductions of their premiums.”

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