Motorists’ insurance costs fell by a record amount in the first three months of this year, taking the average price paid for cover to its lowest level in nearly five years, according to insurers.
The average price paid fell by £32 in the first three months of 2021 compared with the final three months of 2020.
This was the biggest quarterly fall on the Association of British Insurers’ records since it started collecting the data in 2012.
The fall partly reflects insurers passing on cost savings from fewer claims settled during lockdowns, and fewer young drivers, who are likely to pay higher motor premiums, on the road due to lockdown driving test restrictions, the ABI said.
Insurers have faced other cost pressures though, with repair bill prices increasing.
The average price paid for comprehensive motor insurance in the first quarter of this year was £436 – the lowest level recorded since 2016.
The ABI’s motor insurance premium tracker looks at the price consumers pay for their cover, rather than the price they are quoted.
The average premium paid in the first quarter of 2021 was 8% lower than a year earlier.
Laura Hughes, the ABI’s manager, general insurance, said: “While the national lockdown during the period may have led to fewer road journeys, it is good to see that during the first quarter of the year motorists continued to get the best deals from a competitive motor insurance market.
“The next few months will see significant developments in the motor market, as we cautiously emerge from the pandemic returning to more usual driving patterns, and with the introduction, at the end of May, of the official injury claims portal that will simplify the whiplash claims process while ensuring proportionate compensation for genuine claimants.
“While underlying cost pressures around rising repair bills will remain, the market will stay competitive, enabling motorists to shop around for the best deal for their needs.”
The new injury claims portal aims to control high costs associated with whiplash claims through a simple and clear process, while ensuring proportionate compensation is paid.
It will support legally unrepresented claimants through the process of making a claim for soft tissue injuries following a road traffic accident. Claimants will still be permitted to have legal representation to support making a claim through the portal should they wish, the ABI said.