Car Insurance Premiums

Car insurance premiums have been in the spotlight over the last week, partially due to the large number of claims that follows a Bank Holiday highlighted by Lloyds TSB Insurance. However this is not the only reason for car insurance premiums to hit the public eye, according to AA and Sainsbury’s Bank the low rates of cover motorists have enjoyed for the last two years are set to end and many people are likely to see their premiums rise, as many as one in three have seen higher premiums already with no change in circumstances to explain this.

Lloyds TSB urging to motorists to check their levels of cover and this predicted rise in premiums will likely see many consumers examining their current car insurance package to ensure they are getting the best deal. Getting the best deal is not simply about price but also ensuring your levels of cover are adequate. Indeed according to AA insurance many deals and discounts on car insurance are likely to end, the market has simply bottomed out and consumers have to hope prices won’t rise too much to compensate. One ray of hope for motorists is that the AA believes a large rise in premiums would be as bad for the industry as for consumers.

Naturally this news makes it even more imperative that consumers shop around for the best deal for their circumstances. Therein lies an important factor in choosing any financial product, choosing the right product for you. Car insurance is no exception and there are not only deals for everyone but also companies that specialise in serving different consumer bases such as women or older drivers.

However even with all this choice in the car insurance market, there is still room for innovation and a car insurance product currently being tested by Norwich Union proves that. Pay as you go phones were an innovation when they came out, allowing consumers freedom over managing how much they spent and when. Who would think that could be extended to car insurance? Yet that’s what this new product from Norwich Union is testing. The two-year study uses GPS (global positioning satellite) to track motorists’ journeys and their insurance is calculated according to how far they’ve travelled.

This new product could prevent benefits for some consumers, those who don’t drive very much, or young drivers who generally pay high levels of insurance but maybe take short low risk journeys. However while an interesting product, which may benefit some consumers, there are currently no plans by any UK insurers to launch a pay as you go policy in the UK.

Until insurers launch a product like the one being tested by Norwich Union there are still plenty of different companies offering competitive policies. With the rise in premiums noted by the AA and Sainsbury’s Bank it’s important to make the most of a competitive market and shop around for the best car insurance policy to suit you.