Tue, 24 May 2005

The cost of Car Insurance in Northern Island is falling, according to research by the AA.

The insurer's latest British Insurance Premium Index shows that average comprehensive Car Insurance premiums fell by 3.3 per cent over the past year and by 0.7 per cent during the three months of 2005.

Managing director of AA Insurance, Kevin Sinclair, said that insurance costs were lower due to increasing competition in the industry and heavy online discounting by some companies.

However, there is evidence that the increasing number of claims could eventually lead to price increases.

"We are in a highly competitive market place which has seen new entrants and online providers discounting to gain market share." said Mr Sinclair.

"But claims costs continue to rise and with low inflation, and thus low investment income, premiums will need to go up if customers are not to be faced with double-digit increases in the future."

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