Car and home insurance costs fall
The cost of a comprehensive car insurance policy has fallen slightly by 0.7% to £660.64, saving drivers an average £4.83 compared to this time last year.
Car insurance premiums peaked to their highest level in the second quarter of 2017, but the AA said the fall in premiums is due to the ‘Ogden’ or ‘discount rate’ review which affects the value of compensation pay-outs to car injury victims, as well as the government clamp down on whiplash claims.
According to the index, young drivers continue to pay the largest premiums for their cover. Men aged 17-22 pay on average £1,766.17 for a year’s comprehensive cover, while women in the same age group can expect to pay £1,505.28.
Although gender equality rules have been in place for more than five years, young men tend to drive more powerful cars and cover greater annual mileages than women, which explains the higher premiums.
The cheapest age to insure a car is 60-69, with an average quoted premium of £403 with a small difference between genders. Above this age group, premiums begin to rise.
Average quotes for home buildings, contents and combined policies all fell over the first quarter of 2018, but they remain higher than a year ago.
Standalone buildings policies increased over 12 months to an average of 5.1% or £5.74 to £117.47, despite a small fall over the last three months of 0.4% or 42p.
Contents policy quotes increased by 0.4% or 24p compared with this time last year, but over the quarter fell 1.5% or 89p.
The average quote for a combined buildings and contents policy increased by 4.8% or £7.36 to £161.75 over the last year, although over the first quarter of 2018 fell by 0.3% or 42p.
Michael Lloyd, the AA’s insurance director, said: “Despite the increases over the year home insurance remains good value. The average premium for a buildings policy is the same as it was at the beginning of 2011, but reached an all-time peak of £120.94 in the last quarter of 2011.”
Lloyd suggests that the rise in buildings policy premiums, since a low of £97.08 at the end of 2015, has several possible reasons.
“Industry concerns over climate change and the greater likelihood of severe weather causing damage to buildings is ever present. In addition, the weak pound has led to rises in the cost of imported building materials which means repairs are more costly, while there has been a rise in the number of ‘escape of water’ claims.
“However, since 2015 the burden of Insurance Premium Tax (IPT) has doubled. This is nothing more than a tax on responsible people protecting their property and should not be increased.”