AA: Car insurance premium increases halt in 2010

The average car insurance premium quote has decreased by 3.2 per cent in 2010, according to the AA

New figures from the AA reveal that hikes in car insurance seen throughout 2009 came to an unexpected end in the first quarter of 2010.

The latest British Insurance Premium Index, which tracks the movement of both car and home insurance prices every quarter, shows that the average quoted premium for a comprehensive car insurance policy fell by 3.2 per cent in the first three months of the year.

However, the firm's Shoparound premium index, which takes an average of the cheapest annual insurance quotes available, showed a slight increase on last year's figures. This, according to AA analysts, shows premiums are still under pressure following the recession and also indicates that the rest of 2010 will see a resumption of 2009's upward trend.

Simon Douglas, director of AA Insurance, says that the sudden stall in rising premium prices is a surprise but also points out that these strategies are relatively common in the early part of a new year.

"Most years we have seen insurers hold their premiums during the first quarter of the year, when there is greatest competition for business. Last year, for the first time, premiums rose during the first quarter and I expected the same to happen this year," he said.

By Mark Hornby