Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Car Insurance Costs Soaring: What’s Driving the Increase?

by August 11, 2023
August 11, 2023
Car Insurance Costs Soaring: What’s Driving the Increase?

With inflation and rising vehicle repair costs, motorists in the UK are feeling the pinch when it comes to insuring their vehicles.

According to the Association of British Insurers (ABI), the average premium for car insurance in the three months leading up to June reached a record high of £511. This represents a 21% increase compared to the same period last year. Some drivers have even reported receiving quotes that are triple the amount they paid the previous year.

The Factors Behind Rising Premiums

The surge in car insurance costs can be attributed to several factors. One key driver is the sustained cost pressures faced by the insurance industry. In the first quarter of this year, insurers paid out a staggering £2.4 billion for motor insurance claims, a 14% increase from the previous year. This includes claims for theft, vehicle repairs, and personal injury.

Vehicle repair costs have also seen a significant spike, rising by 33% over the past year to reach £1.5 billion. This increase can be attributed to rising costs, including energy inflation and higher prices for replacement parts. In fact, one insurer reported a 40% increase in labour rates and a 21% increase in the cost of replacement parts between June 2022 and January this year.

These rising costs are putting pressure on insurance companies to pass on the expense to consumers, resulting in higher premiums for both new policies and renewals. On average, renewing customers experienced an increase of £36, bringing their average premium to £471. Meanwhile, new policyholders faced an average increase of £21, bringing their average premium to £566.

Real Stories: The Impact on Motorists

The soaring cost of car insurance has left many motorists shocked and frustrated. Diane Cedra, a 66-year-old driver from Solihull in the West Midlands, saw her insurance premium nearly triple when it came time to renew. She was initially quoted £620, compared to the £211.99 she paid the previous year. After negotiating and receiving a customer loyalty bonus, she managed to reduce her premium to £411. Cedra expressed her dissatisfaction, pointing out that she shouldn’t have to pay for the mistakes of other drivers who may not be as careful on the roads.

Another driver, Karl Kemp from Burnley, was perplexed when his insurance premium for his Range Rover Evoque jumped from £925.90 to £1,653.66 despite no changes in his circumstances. Kemp, who had gained an additional year of no claims, expected his premium to decrease. After shopping around, he found a more reasonable quote from First Choice, which was comparable to his premium from the previous year. Kemp emphasised that an extra £700 in insurance costs would have made it impossible for him to afford a car.

Consumer Concerns and Regulatory Oversight

Consumer group Which? has raised concerns about the record-high premiums and the impact on consumers who are already struggling with rising costs in various areas. They question whether insurers passing on increased costs is justified, particularly in the current economic climate. The introduction of the Financial Conduct Authority’s new Consumer Duty aims to ensure that insurers offer fair value in the products they sell.

A report published in June highlighted that 2022 was the worst-performing year for the UK motor insurance market in a decade. Motor insurers paid out £1.10 in claims and costs for every £1 they received in premiums. This indicates significant financial strain on the industry and underscores the need for insurers to address the rising costs.

Read more:
Car Insurance Costs Soaring: What’s Driving the Increase?

0
FacebookTwitterGoogle +Pinterest
previous post
Tim Scott becomes fourth GOP presidential candidate to sign RNC’s ‘Beat Biden’ pledge
next post
Warm Weather Boosts UK Economy in June

You may also like

Specialized translation services offered by agencies

March 28, 2024

Providing Business Clarity: How updated Guidance from the...

January 25, 2024

Edinburgh-based fintech platform Recast raises $5 million in...

July 9, 2024

How UK Businesses Are Building Profitable Websites in...

April 27, 2025

Real Estate for Expats: Understanding Property Laws in...

February 27, 2024

Brits brave storms to back small businesses, spending...

December 11, 2024

Arsenal FC’s cryptoasset ads deemed ‘irresponsible’ by watchdog

August 12, 2022

Enhancing Stakeholder Engagement through Strategic ESG Consulting and...

July 1, 2024

DWP errors leave more than 200,000 pensioners £1.3bn...

December 6, 2023

David Rocker: Insights from a Global Business Leader...

August 9, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Rescissions: A Small but Welcome Step Toward Spending Discipline

      June 5, 2025
    • DAVID MARCUS: Why Navy ships should not be named for gay rights icons

      June 5, 2025
    • GREGG JARRETT: Biden, the ‘marionette president; and the case of the runaway autopen

      June 5, 2025
    • Trump Practically Bans Travel and Immigration from 12 Countries with Flimsy Security Justifications

      June 5, 2025
    • ‘He’s not a big factor’: Trump’s Senate allies dismiss Elon Musk’s calls to ‘kill the bill’

      June 5, 2025
    • Fears grow that Tata Steel could be excluded from Starmer-Trump trade deal

      June 5, 2025

    Categories

    • Business (8,147)
    • Investing (2,008)
    • Politics (15,523)
    • Stocks (3,127)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved