CAR INSURANCE PREMIUMS HIT NEW HIGH OF £635
- It's yet more bad news for drivers, as premiums rise to yet another all-time high
- But there maybe light on the horizon, as motorists paid just 1% extra in Q1 2024
Long-suffering motorists faced another car insurance premium hike this year, with the average driver now paying a record £635 for cover.
This is another record high, and a rise from £627 in the final 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 Q1 2024 rise of 1 per cent gives motorists some hope that the worst may be over when it comes to premium rate rises.
Insurers said that claims costs, thefts and repair prices were behind high car insurance premiums.
ABI director of general insurance policy Mervyn Skeet said: 'We understand that car insurance costs are putting pressure on household finances. These figures show how competitive the motor market is, with insurers absorbing significant cost rises but keeping prices relatively stable.
'Even though these figures demonstrate a slowdown in price increases, we won’t be taking our foot off the gas when it comes to our work on tackling the cost of cover.'
The ABI also said that car insurers paid out £1.14 in claims and expenses for every £1 taken in premiums, according to EY analysts.
However, these figures do not take into account the money that insurers make from investments, a crucial income stream.
What's next for car insurance premiums?
Car insurance premium rises may be slowing, but insurers are divided on whether prices will fall.
The ABI hinted that premiums may continue to rise, and said: 'The latest quarter indicates claims inflation is yet to stabilise, with the cost of repair, replacement vehicles, and theft all rising.'
But the UK's largest insurance firm, Admiral, said last month that premium prices may have peaked.
Admiral chief executive Milena Mondini de Focatiis said it has stopped hiking car cover costs - and has even started cutting a few.
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 increasing prices and are very committed to trying to be competitive.’
The ABI recommends that anyone struggling with the cost of their cover speaks to their insurer.
Read more 2024-04-29T01:33:08Z dg43tfdfdgfd