UK Car Insurance Premiums Reach Record High, Surpassing Previous Peaks

UK Car Insurance Premiums Reach Record High, Surpassing Previous Peaks
Car insurance premiums in the UK have hit their highest levels ever, as reported by WTW and Confused.com.

The Confused.com Car Insurance Price Index, which has been in place since 2006 in collaboration with WTW, reveals that UK motorists are now facing an average cost of £776 for comprehensive car insurance. This figure marks an all-time high, surpassing the previous peak of £663 recorded in 2011. In just the last 12 months, premiums have spiked by an astonishing £222, with a continuous increase observed over seven quarters.

The surge in premium rates is a significant concern for motorists, with insurers grappling to manage a surge of rising costs. Tim Rourke, UK head of property & casualty pricing, product, claims, and underwriting at WTW, explained, “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.”

These rising costs are primarily attributed to the soaring inflation of claims, driven by a sharp increase in used car prices. Additionally, factors like rising vehicle theft, delays in spare parts, longer repair times, and higher wages have all contributed to pushing costs above premium income. As a result, insurers have had to play catch-up by raising prices to cope with the escalating expenses.

Data gathered from over six million customer quotes per quarter indicates that all regions across the UK have experienced double-digit increases in motor insurance premiums over the past year. The South West of England remains the most affordable region for car insurance, with average premiums now costing £509. In contrast, Inner London continues to be the most expensive region, with prices averaging £1,257—a substantial 43% increase over the last 12 months.

Furthermore, for the first time, the average cost of car insurance in Outer London has exceeded £1,000. Drivers in this area now face an average bill of £1,003, adding to the mounting financial burden for motorists across the country.

As car insurance costs continue to climb to unprecedented heights, many drivers are left concerned about the financial strain it will place on their budgets, and experts warn that the situation may further impact motorists in the foreseeable future.

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