Efforts to reduce car insurance fraud have helped premiums fall by 5.6% in the second quarter of 2014, the British Insurance Brokers’ Association has revealed.
In real terms, with inflation factored in, it means car insurance is 7.5% cheaper for consumers than it was a year ago.
The AA says the average UK car insurance policy now costs £504, £120 less than a year ago.
However, a big regional divide in car insurance premiums remains, the AA has revealed. Car insurance in London, the most expensive region in the country, is four times more expensive than that in the cheapest region, the Isle of Man.
The average comprehensive car insurance policy in the Isle of Man costs £231. In London, it is £922.
“The premium reflects the likelihood of a claim being made and, in some urban areas, there is much greater risk of a collision taking place, or of car crimes such as theft of or from a vehicle, uninsured driving or attempts at ‘cash for crash’ fraud,” said Janet Connor, managing director of AA Insurance.
“Sadly, the criminality of some people has a detrimental effect of the premiums paid by honest motorists in such places.”
Speaking of the car insurance premium falls, Graeme Trudgill, BIBA executive director, said: “Overall this is great news for customers and shows that the government and industry initiatives are working to reduce the cost of motor insurance.
“We look forward to seeing further plans coming from the government such as the young driver Green Paper from the Department for Transport.”