Average price of motor premiums hit record high as cost of vehicle repairs surge

The average price of motor insurance hit a record high in Q2 2023 as insurers battled with “sustained cost pressures”, according to a new analysis by the ABI.

Figures published by the association today (11 August 2023) revealed that the average premium paid for private comprehensive motor insurance surged 21% year-on-year to £511, the highest level since records began in 2012.

This number was also up 7% from the first quarter of 2023.

The ABI said the higher premiums reflected continued rising costs for insurers.

It noted that insurers paid out £2.4bn in all motor insurance claims – including theft, vehicle repairs and personal injury – in the first quarter of this year, up 14% from Q1 2022.

The ABI added that the cost of vehicle repairs leapt by 33% over the year to £1.5bn, the highest figure since the ABI started collecting this data back in 2013.

“These continue to be tough times for many motorists and motor insurers alike,” Mervyn Skeet, director of general insurance policy at the ABI, said.

“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.”

Options

The ABI obtained the premium figures through its motor insurance tracker, which analysed 7m policies sold during the second quarter and 28m policies sold over the last 12 months.

It determined the average premium paid for private comprehensive motor insurance by analysing the cost to renew cover and of a new policy.

Figures showed that the average price paid by motorists renewing their cover rose by £36 on the previous quarter to £471, while the price for a new policy was up £21 to £566.

Skeet added: “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.

“Despite cost pressures, it can still pay to shop around to get the policy that best meets your needs at the most competitive price.”