Insurance Rates vs Inflation Rates
While in late 2006, insurance premiums in the UK reached an all time high, in the first quarter of o2007, the trend in sum insurances including car insurance has been against the inflation matching trend.
Research published by the AA, detailing the British Insurance Premium Index published indicated that the average annual premium for a comprehensive car insurance policy fell from £806 at the end of last year to £802 at the end of the first quarter of 2007. The average premium paid for third party, fire and theft (TPFT) cover fell by a similar percentage, from £999 to £993 a year.
While at a micro or personal level, an individual saving of £4 is nothing to write home about and will hardly be felt, on a macro level this reflects and fall of 0.5% which is an inverse match for the Bank of England interest rates rise for the same period is a stark contrast for the 4.4% rise seen through 2006. In short, while in absolute terms the saving is small, it may be an indication of an end to the upwards trend.
Ultimately, the compounded savings provided by such companies, combined with a downturn in price hikes and the online services such as The Motley Fool that allow you to compare insurance spell good news for consumers and remind us all that in today’s age of diversity, the difference between the best and the worst offering can not only be substantial, but can also be inflation defying.