- It’s even more bad news for drivers as premiums rise to another all-time high.
- But perhaps there is light on the horizon, as motorists paid just 1% more in the first quarter of 2024.
Long-suffering motorists faced another rise in car insurance premiums this year, with the average driver now paying a record £635 for cover.
This is another record and an increase on £627 in the last three months of 2023, the Association of British Insurers (ABI) said.
The high cost of car cover has led charities to warn MPs that some drivers are being forced to choose between buying food or insurance.
However, the 1 percent increase in the first quarter of 2024 gives motorists some hope that the worst is over when it comes to premium increases.
Insurers said claims costs, theft and repair prices were behind high car insurance premiums.
At stake: Drivers pressured by auto insurance increases they can’t avoid
Mervyn Skeet, general insurance policy director at ABI, said: ‘We understand that motor insurance costs are putting pressure on household finances. These figures show how competitive the car market is, with insurers absorbing significant cost increases but keeping prices relatively stable.
“While these figures demonstrate a slowdown in price growth, we will not let up on the accelerator when it comes to addressing the cost of coverage.”
The ABI also said motor insurers paid out £1.14 in claims and expenses for every £1 collected in premiums, according to EY analysts.
However, these figures do not take into account the money insurers make from investments, a crucial source of income.
What’s next for auto insurance premiums?
Auto insurance premium increases may be slowing, but insurers are divided on whether prices will fall.
The ABI hinted that premiums could continue to rise, saying: “The latest quarter indicates that claims inflation has not yet stabilized, and the cost of repairs, replacement vehicles and theft are rising.”
But the UK’s biggest insurance company, Admiral, said last month that premium prices may have peaked.
Admiral CEO Milena Mondini of Focatiis said it has stopped raising the costs of auto coverage and even started cutting some.
Focatiis added: “There was a lot to recover, but I think we are in a very different situation now.”
“We remain vigilant…but we are not raising prices and we are very committed to trying to be competitive.”
The ABI recommends that anyone who is having difficulty with the cost of their cover speaks to their insurer.
