Motorists are paying more than ever to insure their vehicles with the industry claiming inflation and a massive rise in vehicle repair costs are to blame. An analysis of 28 million policies found the average premium in the three months to the end of June was £511, 21% higher than this time last year.
Some motorists have contacted the BBC citing quotes triple the previous year.
The Association of British Insurers (ABI) said sustained cost pressures were behind the record highs.
The industry paid out £2.4bn in all motor insurance claims – covering theft, vehicle repairs, and personal injury – in the first quarter of this year, up 14% from the same period last year, the organisation said.
The cost of vehicle repairs leapt by 33% over the year to £1.5bn, reflecting rising costs, including energy inflation, it added.
One insurer alone quoted a 40% rise in labour rates between June 2022 and January this year, with the cost of many replacement parts increasing by up to 21%, the ABI said.
For motorists renewing their cover, average policies rose by £36 on the previous quarter to £471, while the average premium for a new policy was up £21 to £566.
The ABI said the distinction reflected the “different risk profile of new and renewing customers”. A new customer “may be more likely to be a younger, less experienced driver” it added.
Consumer group Which? said the record highs in premiums came at “the worst possible time for consumers already battling cost pressures in a number of other areas”.
“Motorists may be wondering whether insurers passing on increased costs is justified at this time,” the organisation said. “The Financial Conduct Authority’s new Consumer Duty will mean insurers need to be able to demonstrate the products they are selling offer fair value.”
In June, a report found 2022 was the UK motor insurance market’s worst performing year in a decade and that for every £1 motor insurers received in premiums, they paid out £1.10 in claims and costs.
The ABI said its analysis covered the average prices for premiums paid not prices quoted.
