Motor Insurance Costs Surge in the UK
The cost of comprehensive motor insurance in the UK has increased significantly, placing additional pressure on household budgets. According to the Association of British Insurers (ABI), the average premium for car insurance in the first quarter of 2024 reached £635, a 33% increase from the same period in 2023.
Despite this sharp rise, the ABI noted a stabilization in prices, with motor premiums increasing by only 1% on a quarterly basis. This suggests that the rate of increase may be slowing down.
Increased claims: Average claims have continued to rise, reaching a record £4,800. This is due to a number of factors, including the increasing cost of repairs and the growing number of accidents.
The ABI emphasizes the competitive nature of the motor insurance market, with insurers absorbing significant cost increases while striving to maintain relatively stable prices.
Motor insurance premiums have historically tracked inflation, with premiums rising by 1.3% in real terms since the peak in insurance costs at the end of 2017.
While the rate of increase may be slowing, the cost of motor insurance remains a significant expense for many households. The ABI's figures, based on premiums paid by customers of its member companies, were comparatively lower than other estimates derived from quotations. The Office for National Statistics reported a 34.8% year-on-year increase in motor insurance quotes in the first quarter of 2024.
This suggests that consumers may be facing even higher costs when they shop for new insurance policies. It is important to compare quotes from different insurers to find the best deal.