Good news for drivers needing new insurance deals: premiums are 10% cheaper than a year ago, according to the latest AA British Insurance Premium Index.
It found average quoted car insurance premiums rose by just £1 in the last three months of 2014, with the average comprehensive car policy now costing £540.26.
That compares with a rise of 1.2% in the previous quarter — the first increase in three years.
But Janet Connor, managing director of AA Insurance, predicts prices will rise in the coming months.
“Some insurers may have lost business by increasing premiums, leading to a ‘year-end sale’ to boost market share,” she says.
“Nevertheless, the underlying trend is upward although I think premiums will struggle to rise past 10% by the end of the year.”
For home insurers, the average quote for a buildings and contents policy has also remained virtually static over the past three months, with just 5p added to the average annual cost of a policy, according to the index.
The average premium for a combined policy stands at £163.06 — 5.3% less than a year ago.
Connor said mild weather meant insurers had not seen a spike in claims. “Flood and storm damage claims have been well within insurers’ capacity, not affecting premiums,” she added.
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