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The AA's British Insurance Premium Index has shown that, following a peak in premiums during the second quarter of 2017, the average price for car insurance has now been falling steadily for three quarters, as the average quoted premium stood at £660.64 in the first three months of 2018.
This is an improvement of 0.7%, or £4.83 cheaper than a year ago, as well as 2.0% or £13.42 down from the last three months of 2017. As Michael Lloyd, the AA's director of insurance, said: "This is a glimmer of good news for drivers who are facing rising fuel prices and increased vehicle excise duty rates," especially for anyone who needs to renew their cover anytime soon.
The decrease in overall premiums isn't found throughout the UK, however, with Scotland seeing the highest annual rise of 1.5%. Scottish drivers do also enjoy the lowest average rates, at an average of £477.46 in the first quarter of 2018, so the rest of us don't need to feel too bad for them.
While car insurance is going down, the same can't be said for home insurance, which may have seen a quarterly decrease but was still up year-on-year, the AA revealed. The average standalone building cover price was down by 0.4% compared to the last three months of 2017, but still up by 5.1% compared to last year, sitting at £117.47.
In comparison, contents cover has fared a lot better, with a decrease in cost of 1.5% over the last quarter and only a 0.4% rise compared to last year. The average cost of such cover sits at £59.22 as a result. Combined cover, meanwhile, is down by just 0.3% quarter-on-quarter and up 4.8% over the year to sit at £161.75.
Michael suggested a few reasons for the rise in buildings policy premiums witnessed since the end of 2015, such as the greater likelihood of severe and damaging weather due to climate change, and the weaker pound, which has led to a rise in the cost of imported building materials. The main reason behind the rises in both home and car insurance, however, remains the doubling in Insurance Premium Tax seen in the last three years.
"Despite the increases over the year, home insurance remains good value," Michael concluded. "The average premium for a buildings policy is the same as it was at the beginning of 2011, before it reached an all-time peak of £120.94 in the last quarter of 2011."
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