Insurers pass on rising repair costs to drivers, with further premium rises expected
Average car insurance premiums were a whopping 16 per cent higher in the first quarter of 2023 compared to the same period a year ago, with insurers blaming the rising costs of repairs and materials for increased prices.
The Association of British Insurers, which represents car insurers doing business worth an eye-watering £19 billion annually, says members are facing cost increases for energy and materials as well as other inflationary pressures associated with repairs and settling claims. It’s a stark turnaround from the last couple of years, when car insurers benefited from fewer claims thanks to lockdown and reduced commuting journeys during and after the pandemic.
- Best car insurance comparison sites 2023
“Every motorist wants the best insurance deal, and insurers are doing all they can to keep motor insurance as competitively priced as possible,” says the ABI’s senior policy adviser Jonathan Fong. “Like many other sectors, insurers continue to face higher costs. The price of certain raw materials and energy costs are rising at rates well above general inflation, and these costs are becoming increasingly challenging.”
According to the ABI, costs increases reported by its members include the high cost of energy that garages are forced to pay, rises in the average cost of paint and materials amounting to 16 per cent, and the cost of courtesy cars to insurers rising by 30 per cent – in part because component shortages mean longer waits for repairs when the customer’s own car is off the road.
- Cheapest cars to insure in the UK 2023
The ABI’s insurance premium tracker records the amount private drivers with comprehensive policies pay for their cover, and the average premium currently stands at £478. The average price for renewing cover was £436, while the average premium for a new policy was £545.
This rising cost of insurance coupled with the wider cost of living crisis has also led to a significant growth in car insurance frauds where scammers offer fake policies to motorists at attractive prices.
Auto Express has partnered with Quotezone to help you find a cheaper car insurance deal. Our tool lets you compare prices from a range or reputable insurance companies in one place…
Source: Read Full Article