Car insurance prices falling

| December 14, 2012
Car insurance prices falling

The cost of car insurance fell by 6.6 per cent this month, compared with a year ago, according to Tiger Watch, the car insurance price monitor produced by Tiger.co.uk.

Compared with November, prices increased by 0.4 per cent, but across a three month period, prices have fallen to a two-year low.

Competition between insurance providers is pushing prices down, according to Tiger.co.uk.

However, the gap between the cost of car insurance for men and women has narrowed from more than 10 per cent to less than 1 per cent over the past year.

Premiums for women, especially younger women, are traditionally lower than those for their male counterparts, as they are considered a lower risk group.

This is set to change permanently on 21 December, when an EU Gender Directive comes into force, which will prevent insurers setting prices based on gender, but with insurers making early preparations for the change, its effect is already apparent.

The Association of British Insurers (ABI) has unsuccessfully lobbied against the directive for a number of years.

Adeola Ajayi of the ABI said: “Insurers are now busy working hard to adjust their systems and remain committed to offering premiums and benefits that reflect risk as accurately as possible, despite having to ignore decades worth of data”.

Many young drivers are using telematics or ‘black box’ technology to help keep down the costs of their insurance.

The technology allows insurers to detect factors such as speed, cornering, braking and other driving behaviour, and safe drivers are rewarded with lower premiums.

Insurance technology firm Cobra has suggested that the technology could also be used to help stamp out ‘crash for cash’ insurance fraud, in which drivers deliberately cause an accident in order to make a claim.

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