Car insurance is on the decline, but new laws could lead to a “hardening market.”
WHILE CAR INSURANCE PREMIUMS ARE ON A “downward trend across the board,” experts warn that new restrictions enacted next year may result in a “hardening market.”
According to Consumer Intelligence, car insurance premiums have decreased by 8.4% in the last year. Premiums for experienced drivers between the ages of 25 and 49 dropped the most, by 2.1 percent.
Premiums for drivers over the age of 50 have also decreased by 1.5 percent in the last three months.
One of the main reasons for the lower expenses, according to experts, is improvements made by the Financial Conduct Authority.
The FCA’s updates will prevent providers from penalizing loyal consumers by gradually boosting premiums.
Customers are less inclined to switch every year to different suppliers in search of the greatest offer if expenses remain steady.
As a result of these laws, businesses are now cutting their expenses in order to attract and retain a big consumer base.
Experts have also argued that the lowering in rates is due to an increase in telematics quotations.
Drivers who drive safely are rewarded with lower premiums, but any speeding or reckless driving will result in greater charges.
Telematics agreements are most common among young drivers under the age of 25, although they have recently proven to be advantageous to somewhat older drivers.
Telematics agreements now provide the five most economical policies for drivers between the ages of 25 and 49.
Consumer Intelligence Product Manager Harriet Devonald said it was “unlikely” that prices would continue to fall for much longer.
“We are witnessing a decreased trend in premiums across the board – in all of our age and regional segments – and it isn’t just because of the increase in telematics quotes,” she said.
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“With the FCA’s pricing remedies set to take effect at the end of the year, some brands are attempting to increase volume while they still can.
“Others have been able to transfer savings on to customers thanks to a calm year of vehicle claims in 2020.
“At the same time, other brands are following the market downward to be competitive.
“As we move into the second half of the year, this tendency is unlikely to continue.
“We will be once the new regulation takes effect.” Brinkwire Summary News”.