There is not much to celebrate in the latest AA/Lansdowne Market Research survey into the cost of motor insurance. Six months since the last survey, motor insurance prices have risen for nearly every male category of driver, with any price decreases being made mainly by companies whose premiums were at the high end of the market anyway. Women drivers are facing mainly marginal increases in premiums.
The survey considers the cost of comprehensive insurance for male and female drivers aged 25, 35, and 45 with a 1992 1.1 litre Ford Fiesta valued at £5,000. The survey also reported on the main benefits of the contract which can include personal accident and windscreen cover and bonus protection which allows one or two claims. The bonus protection may or may not include a claims cash limit. The 10 participating insurers are PMPA, Guardian Direct, AA Car Insurance, Premium Direct Insurance, Hibernian, First Call Direct, Celtic International, General Accident, Quinn Direct and Norwich Union.
The cheapest insurance continues to be offered to women drivers in their mid-40s followed by the two younger age groups. Older male drivers fare best though some insurers (like Norwich Union and Premier Direct) offer 35-year-old males cheaper rates than 45-year-olds. Twenty-five-year-old males can expect to pay up to £500 more for the same level of insurance than their older counterparts.
The cheapest comprehensive insurance for a 25-year-old women was offered this time by Hibernian (£305) and the most expensive by Norwich Union (£717) a difference of £412. Celtic Insurance and General Accident declined to quote for this age group. For the 35 age group, the cheapest rate was from Celtic (£272) and the most expensive from General Accident (£410). Women aged 45 can buy the cheapest cover from Guardian Direct (£260) and the most expensive from General Accident (£448). Only three out of 28 rates quoted for women were reduced since the last survey in April, and in each case reduced the previously highest quotations for women drivers aged 25. The least expensive cover for males aged 25 was offered by AA Car Insurance (£579), up from £505 last April but still several hundred pounds cheaper than the PMPA (£917). Male drivers aged 35 can buy the cheapest cover from Celtic Insurance (£262), a rate that has been reduced since April when it was £283. The most expensive cover is from General Accident (£448), a rate that has not changed in six months. Male drivers aged 45 can expect to pay as little as £262 from Celtic or as much as £451 from Norwich Union. In both cases these rates have come down from those in April.
The up-to-20 per cent rise in the premiums for young women drivers by companies like Premier and First Call Direct and as much as a third by the same companies for young male drivers suggests that the risks associated with young drivers is not abating, despite the efforts, such as they are, of all the authorities to curb speeding and drink driving and to encourage better driving training. The increasing numbers of cars on the road is also playing a part in the growing volume and cost of accidents. Not all companies are penalising all male drivers however. Celtic Insurance and First Call Direct have decided to reward male drivers age 35 and 45 with slight cost reductions. In the case of a male driver age 45, First Call Direct has brought down their premiums by £28.
The benefits packages attached to comprehensive contracts has also changed in the past six months with the more expensive insurers adding extra benefits, undoubtedly as a form of compensation for higher overall costs. Drivers who insure with the AA and Premier Direct enjoy the widest of all benefits packages, something that should be considered carefully when choosing a contract. Low initial premiums may appear very attractive, but could backfire during the claims process especially if there are no bonus-loss guarantees in place.
As a single snapshot of a particular motor insurance policy, the AA/Lansdowne survey is very useful, but drivers need to keep in mind that a newer or more valuable car may change the rankings of the different insurance companies. Anyone seeking motor insurance is advised to shop around themselves, or use the services of a good broker.
