Comprehensive car insurance premiums have soared by a record 40% (£222) during the last 12 months, with UK motorists now paying £776 on average, according to the latest Confused.com car insurance price Index in association with WTW.
Premiums are at their highest ever levels since the index was launched in 2006, beating the previous peak 12 years ago in the second quarter of 2011 when the average premium was £663. At 40%, the annual rise in motor insurance costs continues to outstrip CPI inflation, held at 8.7% in May.
Car insurance premiums have also increased for seven straight quarters following a price rise of 18% (£119) in the second quarter of 2023. Based on price data compiled from over 6m customer quotes per quarter, this is the largest quarterly increase on record and by a significant margin. The previous fastest quarterly rise was set in the second quarter of 2010, when prices rose by 12%.
Tim Rourke, UK head of P&C pricing, product, claims and underwriting at WTW, said: “Motorists are facing the sharpest acceleration in premium rates, as insurers continue to grapple with a cocktail of rising costs. High levels of claims inflation are being driven primarily by the sharp rise in used car prices, amplified by rising vehicle theft, spare part delays, longer repair times and higher wages, all pushing costs above premium income and forcing insurers to play catch up by increasing prices.”
Drivers aged 17-20 took the largest hit of any age group. Male drivers in this age bracket experienced an annual percentage increase of 60% (£903) taking their premiums to £2,414, with prices not seen at this level since 2012. Female drivers from the same age group saw their premiums surge by 61% (£652) during the last 12 months to a record £1,728.
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