Average price paid for motor insurance has fallen by nearly £40 this year so far

The average price paid for comprehensive car insurance has fallen by about £40 this year so far, according to an industry body.

The Association of British Insurers (ABI) said motorists paid an average of £429 for a policy in the third quarter of this year.

She added that drivers continue to benefit from fewer auto claims made during Covid-19 lockdowns, helping to keep policy rates at their lowest level in more than five years.

The usual price motorists pay for coverage has fallen by £39.47 this year so far.

The change by the Financial Conduct Authority (FCA) means that from January 1, 2022, insurers will be required to offer renewed customers a rate no higher than the price they would pay as a new customer.

The Financial Conduct Authority (FCA) previously said that it is possible that companies will no longer offer unsustainable low-price deals to some customers.

But the regulator estimates its measures will save consumers £4.2 billion in total over 10 years, by removing the loyalty penalty that people pay for sticking with their existing home or car insurance provider and making the market work better.

Laura Hughes, director of ABI General Insurance, said: “Motorists continue to see the benefits of fewer claims being made during pandemic lockdowns.

“While the coming year will see some significant changes in how car insurance is priced with the introduction of pricing reforms, and cost pressures continuing around repair costs, the market will remain competitive, so it will still pay motorists to shop to get the best deal for their needs.”

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