An annual increase in comprehensive car insurance premiums of 40% is outstripping CPI inflation, held at 8.7% in May, Confused.com has revealed.
The record 40% increase, representing a rise of £222 over the last 12 months, means motorists are now paying £776 on average.
Car insurance premiums are at their highest ever recorded levels since the Confused.com Car Insurance Price Index, where the increased have been revealed, launched in 2006.
The previous peak was 12 years ago in Q2 2011, when the average premium was £663.
Car insurance premiums have also increased for seven straight quarters following a price rise of 18% (£119) in Q2 2023.
The previous fastest quarterly rise was set in Q2 2010, when prices rose 12%.
Tim Rourke, UK head of P&C pricing, product, claims and underwriting at WTW, which sponsors the price index, blamed insurers’ rising costs for the increase.
He said: “Motorists are facing the sharpest acceleration in premium rates, as insurers continue to grapple with a cocktail of rising costs.
“High levels of claims inflation are being driven primarily by the sharp rise in used car prices, amplified by rising vehicle theft, spare part delays, longer repair times and higher wages, all pushing costs above premium income and forcing insurers to play catch up by increasing prices.”
Steve Dukes, chief executive officer at Confused.com, commented: “Consumers are facing rising costs across the board, and car insurance is no exception. But the price increases we’re seeing are so significant that it’s going to cause real financial impact to many people.
“We know that there’s a lot of factors going into this, with inflation pushing up the cost of claims for insurers.
“But as an industry we have to help drivers understand where they can save money when it comes to renewing their policies.
“We know a lot of drivers are shopping around and switching, so now is the time for insurers to be as competitive as they can be. Doing so means there’s a higher chance of winning new business, but also helping drivers by not adding to the already strained financial pressures many are facing.”
This article is care of and sourced at https://www.claimsmag.co.uk/2023/07/record-40-rise-in-comprehensive-car-insurance-premiums
