Motor insurance premiums reached a record high in the second quarter of 2023, with the average comprehensive policy now £511.
This is a seven per cent rise on the first quarter and 21% up on the same quarter of 2022.
According to the Association of British Insurers, price rises have been driven by rising repair costs, which have soared by 33% in a year, wage inflation that is up to 40% for some insurers, and a 12-21% increase in the cost of replacement parts.
ABI data also revealed that renewals were up by £36 on the previous quarter to £471, while new policies increased by £21 to £566.
Meanwhile, insurers paid out £2.4bn in all motor insurance claims in the first quarter of this year, a rise of 14% on the first quarter of 2022.
Mervyn Skeet, the ABI’s Director of General Insurance Policy, said:“These continue to be tough times for many motorists and motor insurers alike. With many families facing higher cost of living bills, no one wants to see the cost of their motor insurance rise. Insurers remain determined to ensure that motor insurance remains as competitively priced as possible, but this has become increasingly challenging, given the continued rising costs that they are facing.
“We would urge anyone concerned about being able to afford their insurance to speak to their motor insurer to see what options might be available. And despite cost pressures, it can still pay to shop around to get the policy that best meets your needs at the most competitive price.”
