Home Money Average car insurance premium hits £543 – but insurers defend hikes saying costs have soared

Average car insurance premium hits £543 – but insurers defend hikes saying costs have soared

0 comments
Up and down: This shows how car insurance premiums have increased since the start of 2022
  • Car insurance prices increase by 25% in a year and by 70% in ten years
  • But insurers have published new figures intended to defend the steep increases

Car insurers have spoken out to defend record high premiums, with the average driver paying £543 a year by 2023.

The average car premium in 2023 rose 25 percent from £434 in 2022, according to the Association of British Insurers, reaching a peak of £627 in the last three months of the year.

Overall, the average motorist now pays 70 percent more to insure their car than they did ten years ago: £627 now versus £370 in 2013.

But the ABI has now defended these price rises with a new analysis of why insurers are increasing premiums.

Up and down: This shows how car insurance premiums have increased since the start of 2022

Up and down: This shows how car insurance premiums have increased since the start of 2022

According to the ABI’s latest claims tracker, car insurers will have paid a record amount of claims in 2023, averaging £1.13 million per hour, or £9.9 billion in total.

The trade body said this was the highest figure since it started recording claims data in 2013, and an increase of 18 per cent on the £8.4 billion paid out in 2022.

Motorists are also making more claims, the ABI said – with 2.3 million claims settled in 2023, a 10 percent increase on 2022.

Vehicle repair costs increased by 31 percent, from £4.7 billion in 2022 to £6.1 billion in 2023.

Meanwhile, theft claims have also increased in 2023, the ABI said. In 2022, insurers paid out £543 million on these claims, up 23 percent to £669 million in 2023.

Insurers also said the cost of providing replacement cars increased by 35 percent, from £444 million in 2022 to £597 million in 2023.

ABI general insurance manager Jonathan Fong said: “Important and continued cost pressures facing insurers, such as a 31 percent increase in repair costs over the past year, have impacted coverage costs.

‘Despite this, insurers continue to do everything they can to make car insurance competitively priced. Through our recently published Roadmap, the sector is working hard to combat the rising costs of car insurance.

‘And it can still be worth shopping around to find the policy that best suits your needs, at the most competitive price.’

You may also like