Car insurance premiums fall by 3%

Between June 2008 and December 2008, the average car insurance premium has fallen by 3.1%, according to the latest Sainsbury's Car Insurance Index.

However, Sainsbury's Bank warns that premiums could be set to rise this year because of an increase in personal injury claims and their associated costs. They rose by around 22% last year to over £6 billion and are expected to increase further.

The index reports significant differences in the change to premiums for motorists of different age groups. Between June 2008 and December 2008, those motorists aged under 25 and those aged over 65 saw their premiums rise by on average 2.22% and 2.6% respectively. All other age groups saw their premiums fall.

Joanne Mallon, Sainsbury's Car Insurance Manager said: "The average motorist is still looking at around £500 to insure their car so it is important for them to shop around for competitive insurance. However, motorists should be aware that paying a lower premium does not mean they have to forfeit good cover - by shopping around you can find both. Just make sure that when comparing car insurance policies, you do so on a like-for-like basis."

Although premiums decreased during the second half of 2008, between December 2007 and December 2008, the average car insurance premium actually increased by 96 pence.

Mallon continues: "Premiums could rise as a result of the rising cost of personal injury claims and also repairs. However, given that around two thirds of motorists admit to some form of potentially dangerous activity whilst driving such as eating or using mobile phones, by cutting out these practices we can reduce the chance of being involved in an accident."

In addition, Sainsbury's Car Insurance also offers motorists an extensive range of cover and benefits. This includes a courtesy car when using one of its recommended repairers (comprehensive cover only) and a no claim discount of 70% if you take out a policy and have not made a claim in the past five years, rising to 75% after a further five years' claim free driving with Sainsbury's Car Insurance. It is also one of only a few providers to offer new-for-old replacement child car seats after an accident as a standard feature of its comprehensive policy, even when there is no perceived damage, as well as support and compensation if you're a victim of car jacking or road rage.