Floods yet to affect motor insurance premiums

by Richard Kilner

Story link: Floods yet to affect motor insurance premiums

Experian have learnt that the increase in the average quote for direct, comprehensive cover motor insurance from quarter two to quarter three (from July to September) was a mere 0.8%.

It has now reached £567.30, only £4.60 more than in the second quarter of this year, despite the unprecedented flooding.

However the broker market has been more turbulent, seeing a sharp increase in the premium rate average in the last quarter, for both comprehensive and third party, fire and theft cover.

From June to July comprehensive cover rose from £495 to £538. Third party, fire and theft rose even more from £570 to £632, and premiums continued to increase for the duration of the third quarter.

The broker market has been somewhat turbulent of late, with the lowest average price this June since Experian began collecting data (in June 2005) being swiftly followed by the highest average price in the third quarter.

Experian accounted for the rapid changes by citing the new products brought into the market causing greater competitiveness and thus lower prices in June.

The organisation does not believe the subsequent price increase to be related to the summer flooding, as the broker market is slower to respond to events than the direct market.

The real effect of the floods on motor insurance should be seen in the next few months.