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Whiplash reform sees insurance premiums drop

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16/04/2018
UK car insurance prices have dipped for the first time since 2014, after the government cracked down on whiplash payouts and reviewed compensation to people involved in car accidents.

The average premium from January to March of this year was £768, down by 2% on the same period a year ago, research by comparison site Confused.com revealed.

However, women still have the edge for car insurance premiums, in spite of an EU directive stating insurers weren’t allowed to discriminate. A higher number of motoring convictions and bigger, faster cars means men on average pay £95 more than women.

For young drivers, the gap is even wider. A typical male driver aged 17 to 20 pays £2,348 on average, compared with £1,699 paid by women of the same age. The cheapest average insurance is paid by female drivers between 61 and 65, at £363.

Confused.com said the fall in premiums came as a result of reforms to whiplash claims, intended to crack down on false reporting. The “Ogden rate” – the formula used to calculate compensation for accidents – also changed.

Freddy Macnamara, CEO and founder of pay-as-you-go car insurer, Cuvva, said: “Drivers finally have some good news, with the government’s turnaround on the discount rate rules at last trickling down to annual premium pricing. The cost of running a car has become unmanageable for a lot of people in the last two years and this new data will offer a ray of light for those who need to drive, but are struggling to meet the costs.

“A persistent problem, however, is the sheer number of drivers who are still auto-renewing policies. More than one in three motorists did this last year, overpaying on their insurance by £600m as a result.”

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