Car insurance premiums have more than doubled since last year with experts warning drivers of the expensive premiums they could continue to face in the coming years.
Drivers saw premiums increase by 56.4 per cent in the year to February with drivers quoted between £500 and £749 depending on the region.
Despite the high increases, it is still lower than the record high of 67.2 per cent in November last year. However, it is still the third-highest annual increase in car insurance prices since 2021.
This comes as Britons struggle to deal with the rising cost of motoring, with car tax prices increasing at the start of the month and the price of standard vehicle repairs.
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Drivers saw premiums increase by 56.4 per cent in the year to February
GETTYMax Thompson, insurance insight manager at Consumer Intelligence, said: “The new year saw some major brands make competitive movements and reduce premiums.
“However some of this was unwound in February indicating it may have been more of a tactical move than a long-term trend.”
Car insurance price rises have been well documented this year, with the Association of British Insurers (ABI) working to limit the impact on customers.
Jonathan Fong, manager of general insurance policy at the ABI, said: “Insurers are aware of the financial challenges customers are facing and are determined to keep motor insurance as competitively priced as possible.”
Fond added: “Our motor premium tracker is the only collection based on the price customers pay for their policy, rather than quotes, and shows that the average motor premium increased by 25 per cent last year to £543.
“This was largely driven by above inflation increases in the cost of repairs, thefts and replacement cars, which contributed to insurers paying out a record £9.9billion in claims for the same period – an average of £1.13million per hour.
“As an industry, we’re committed to supporting customers and finding ways to help tackle the cost of providing motor insurance."
He added that the ABI's 10-point roadmap is designed to hit back against the rising costs, with the organisation partnering with the Government and any relevant stakeholders.
On top of steep car insurance prices, drivers also pay insurance premium tax, which is set at 12 per cent and is a levy on general insurance premiums.
To help lower costs for drivers, the ABI has been consulting with the Government to help reduce IPT which could save motorists money.
Mervyn Skeet, director of general insurance policy at the ABI, said: “It is high time we unmask this tax which penalises people and businesses for being responsible.
“This tax hits the poorest hardest because they typically spend more on insurance, such as home and motor cover, as a proportion of their income. We should cut IPT now.”
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Experts are also calling on the Government to cut the rate of IPT
PAThe Government generated roughly £7.45billion from IPT last year with stats estimating that it will surpass £8billion this year.
