Car insurance premiums falling at record rate

A clampdown on fraud and restrictions on claims management companies are amongst reasons that the cost of car insurance is falling at a record rate.

According to the insurance arm of the AA, the average annual comprehensive car insurance quote fell to £594.84 this month, it said, down 9.8% from £659.53 last July - the biggest decrease since the AA insurance index began in 1994.

Third party, fire and theft quotes also fell between July 2012 and this month - down 4.8% to £820.58 on average.

Despite the fall, premiums remain much higher than they were six years ago.

New gender equality laws have lowered premiums of men by far more than expected while women's premiums have remained static, according to AA Insurance's research.

Fraudulent claims - especially for whiplash which is often difficult to disprove - are also down.

Also, anyone suing for accident damages with the help of a no-win, no-fee lawyer - known as a conditional fee arrangement - now has to pay their lawyer's success fee from their own funds if they win their case.

It was previously added to the bill of the losing party.

This had made claims more expensive to pursue.

A ban on referral fees was introduced in April.

They were paid by lawyers and claims management firms to breakdown firms, brokers and the insurers themselves, in exchange for providing information about accident victims.