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Floods 'not affecting car insurance costs'

09/10/07

The cost of car insurance during the third quarter of 2007 increased by 0.8 per cent despite the impact of flooding in June, it is claimed.

Research from Experian has revealed that the average quote for comprehensive car insurance cover in the direct market reached £567.30 compared to a second quarter average of £562.70.

Inclusive of the July, August and September months, the figures suggest that the flooding has had no immediate impact on motor insurance costs.

However, Experian managing director of insurance David Murby said he believes that the impact of the floods in the direct market could emerge in the next few months based on the settling of relevant claims and time for car insurance providers to assess the real impact.

Meanwhile, the broker market recorded price increases to an average quote of £639.70 for third party, fire and theft insurance premiums being the highest quarter price since July 2005.

Mr Murby noted a dip in broker prices in June was likely to have been a result of the introduction of newer, competitively priced products.

On the subsequent price increase in broker premiums, he added: "The broker market tends to react slower than the direct market to events such as flooding, so the increases we are seeing now are highly likely to have been pending prior to the floods."

The RAC offers advice to drivers living in or driving through areas that contain a risk of flooding.

Drivers are urged to park on higher ground if flooding is expected and to avoid parking in areas that could cause obstruction to emergency services.

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