Motor insurance prices continue sharp rise

Motor insurance prices jumped another 12% in the fourth quarter of last year, meaning premiums rose by more than 25% over the whole year.

According to figures released by the Association of British Insurers, average polices in the last three months of 2023 were £627. This is 12% higher than the £526 recorded in the third quarter of the year and a whopping 34% up from the £470 recorded in the last quarter of 2022.

The ABI also revealed that insurance payouts have shot up. It said payouts for vehicle thefts rose 35% in the third quarter of 2023 while repair costs were up by 32% to £1.6bn – with EVs about 25% more expensive to repair than ICE equivalents and taking 14% longer.

Mervyn Skeet, director of General Insurance Policy, ABI, said, “We’re acutely aware of the impact that rising motor insurance premiums continue to have on motorists. Rising repair costs and other factors outside of insurers’ control mean there is no single action that could bring down premiums. However, we are determined to do all we can to put the brake on.

“We are working with our members to understand what actions can be taken to help motorists manage costs. The cost of paying monthly (premium finance) is one of a number of topics we continue to discuss with our members and the Financial Conduct Authority (FCA). We’ve also been very clear, and continue to underline, that cutting Insurance Premium Tax would provide immediate relief for stretched consumers. We will be saying more, as we can, on other steps we will take in the coming weeks.”