The average price for motor insurance in 2021 fell to its lowest level in six years according to the ABI but sustained cost pressures are beginning to impact the cost of cover.
The latest ABI Motor Insurance Premium Tracker shows that in 2021 the average price paid for comprehensive motor insurance was £434. This fell by seven per cent on 2020 to its lowest level since 2015.
However, in Q4 2021, the average premium paid rose by £11 on the previous quarter to £440. Despite this rise, the average premium was three per cent lower than the same quarter of 2020.
The rise highlights that continued cost pressures on insurers could be starting to filter through into the cost of cover.
Laura Hughes, the ABI’s Manager, General Insurance, said: “While we expect the motor insurance market to remain highly competitive in 2022, rising costs for parts, repairs and other supplies and services will continue to put pressure on premiums for motor insurance for both new and existing customers.
“Insurers appreciate that many households are facing a cost-of-living squeeze with rising household bills as costs rise in other areas of the economy, and they will be doing all they can to ensure competitively priced motor insurance, in the face of the variety of cost pressures faced.
“While the FCA pricing rule changes may well lead to fewer introductory discounts, it should still pay to shop around for the best deal for your needs.”
ABI’s tracker looks at the price consumers pay for their cover, rather than the price they are quoted.
