The price UK drivers pay for car insurance continues to fall after lockdown saw a drop in the number of accidents on British roads. That’s according to new figures from the Association of British Insurers (ABI), which monitors insurance pricing and has seen the average premium fall by £40 so far in 2021.
The ABI’s Motor Insurance Premium Tracker shows the average insurance premium during the third quarter of 2021 was £429, the lowest quarterly average since 2016. Over the course of 2021 alone, the average premium has fallen by £40, and it’s seven percent lower than it was during the same quarter of 2020.
According to the ABI, the lower prices are the result of the coronavirus lockdowns, which caused a drop in traffic and a reduction in the number of insurance claims. Despite the last lockdown ending in April, the ABI says the effects are still having a positive impact on drivers’ premiums.
The news follows research from insurance comparison site CompareTheMarket.com, which found the average insurance quote between June and August was £71 lower than during the same period in 2020. As a result, the average insurance quote now stands at £631, compared with an average of £702 for the same three-month period in 2020.
Over the same period, the cheapest average quotes fell to just £533 this summer – a £60 drop compared with the summer of 2020 and the lowest quarterly average since the summer of 2015.
However, while CompareTheMarket.com looks at quotes on its comparison site, the ABI says its Premium Tracker is the “most accurate” model. That’s because it takes account of the price consumers pay for their cover, rather than the price they are quoted.
Laura Hughes, the ABI’s manager for general insurance, said forthcoming changes to the way in which insurance premiums are calculated and “cost pressures” due to increasing repair costs meant drivers should still shop around to keep their costs down.
“Motorists continue to see the benefits of fewer claims made during the pandemic lockdowns,” she said. “While next year will see some significant changes in how motor insurance is priced with the introduction of pricing reforms, and continued cost pressures around repair costs, the market will remain competitive, so it will still pay for motorists to shop around for the best deal for their needs.”