Car insurance premiums are going down, the AA has revealed.
The average quote for fully comprehensive insurance fell by 2.9% to £844 in the third quarter of 2012, according to the AA British Car Insurance Premium Index.
Car insurance policies bought via price comparison websites also went down in price by 1% to £612.
However, personal injury claims continue to inflate premiums, with the average cost of a claim totalling £8,400.
Simon Douglas, director of AA Insurance, claims that increasing competition in the insurance industry is driving premiums down, despite the fact that the cost of claims is on the up:
"Competition is tough in the insurance market, forcing many companies to reduce premiums despite the fact that costs show little sign of abating."
New legislation
New EU rulings on gender equality come into force on 21 December, making it illegal for insurance companies to offer cheaper policies to female drivers. This means that premiums for female drivers could rise by as much 25%.
Because of the new legislation, Douglas is advising female drivers looking to buy cover to do so as soon as possible.
"For new drivers, my advice to young women would be to buy their insurance as soon as they can, while young men might be advised to wait until the New Year, because their premiums are likely to fall further," he said.
There is some good news, however. From April next year, an industry practice which has driven up premiums over the past ten years will be banned.
The industry's use of referral fees to sell information on accident victims to claims management firms will be made illegal. In addition to this, anyone suing for accident damages through the use of a no-win, no-fee lawyer will have to pay their lawyers fee in the event of a successful claim, making it more expensive to pursue a claim.
