Motorists forced to pay £50 more on car insurance as thefts and inflation see costs skyrocket
Prices for car insurance are up nine per cent from last year
GETTY
Drivers have been slapped with harsh premiums for car insurance as prices continue to rise reaching unaffordable levels, prompting experts to call for urgent support.
On average, between July and September, motorists are paying roughly £50 more for car insurance than last year, according to new data.
The Association of British Insurers found that average car insurance prices were priced at £612, slightly lower than in April to June where prices were two per cent more but overall was nine per cent higher than in the third quarter of 2023.
The ABI attributed the price hike to significant and sustained cost pressures insurers are experiencing as well as broader price inflation.
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Car insurance rates have soared since the pandemicGETTYWhile prices remain high, insurers have insisted they have paid out their fair share with the ABI recording a total of £2.9billion paid in claims in the third quarter of the year.
Mervyn Skeet, ABI director of general insurance policy, said: “While our latest figures show the second consecutive quarterly drop in average motor insurance premiums, we know that the industry continues to face significant cost pressures, and the price of cover remains a strain on household finances.
“We remain determined to do all we can to support motorists. As part of this, we’re committed to playing our part in supporting the Government’s taskforce, and we look forward to bringing our ideas and expertise to the table, contributing to this initiative on behalf of our members.”
The report also found that repair costs reached £2billion during the three-month period, which was 26 per cent higher than the same period a year ago.
Meanwhile, the average claim for vehicle theft dropped by seven per cent over the quarter to £12,200, but theft from a vehicle increased by 17 per cent to £3,000. This problem has been particularly apparent with keyless vehicles, which have seen insurance prices skyrocket as a result.
To help combat the rise in prices, a new cross-Government motor insurance taskforce, supported by industry experts, will be rolled out by the Transport Secretary and Economic Secretary to the Treasury to help reduce the financial burden of car insurance.
Transport Secretary, Louise Haigh explained that car insurance is essential, “not a luxury” and that the Government is committed to getting costs under control.
She said: “The rising cost of cover affects all drivers, but some groups have been hit harder than others. No matter your background or circumstance, this government is determined to ensure drivers get a fair deal.”
“It will give this issue the attention it deserves – rooting out the factors driving up costs for industry and ensuring drivers are able to hit the road.”
Haigh stated that the task force will investigate the causes of rising costs, help assess whether consumers are receiving fair value for money and look at the impact on the groups hit the hardest by price hikes.
The taskforce forms part of the new Labour Government’s manifesto commitment to reduce the high costs of insurance for drivers.
It also builds on the 10-point roadmap released earlier this year by the association which outlined the key contributors to cost hikes and how the Government could help.
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Over a three-month period, insurers paid out £2.9billion in claims
PAOne of the suggestions included reducing Insurance Premium Tax which has been fixed at 12 per cent for the past few years, which adds an average of £67 to every car insurance policy.
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