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Car insurance prices fall 3.2%

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The cost of car insurance fell 3.2% in the first quarter of the year, research has shown.

An AA poll said the average price of comprehensive cover now stood at £968.

The news was unexpected, with many predicting further growth after a record 18.7% increase in 2009.

But the motoring group urged caution, explaining that insurers typically held prices during the first quarter of the year when competition was greatest, and predicting double digit increases throughout the remainder of 2010.

Spokesman Simon Douglas said: "Insurers no longer have reserves on which to call in order to keep rises in check.

"The same pressures as last year continue to force insurers to increase premiums: fraud and personal injury claims especially remain a significant concern."

© Press Association 2010