Typical car insurance premium now costs £629 as prices surge to highest level in THREE YEARS
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A typical car insurance premium now costs £629 as prices rise to their highest levels in THREE YEARS
- Motorists pay higher prices because insurers pass on damage increases and costs
- Drivers in London, Scotland and Northern Ireland are seeing the biggest increases
The average annual car insurance premium has risen by £100 in 12 months to a three-year high of £629 per annum.
This 19 per cent increase over the past three months means UK motorists are now paying the highest price for their car insurance in three years, according to data from Confused.com.
In fact, £629 is just £34 a year less than the most expensive car insurance price ever recorded.
Up: Auto insurance premiums are rising again after two years of lower prices
Half of all drivers noticed their car insurance premiums went up in the last quarter, Confused.com said, with an average increase of £46.
Male drivers now pay £672 a year, an increase of 19 per cent year on year, or an extra £105.
Women drivers now pay £557 for car cover, also up 19 per cent, with prices £90 more than the same period of 2021.
Those are the regions where car insurance prices are rising the fastest Central Scotland, Northern Ireland and central London, all of which saw price increases of 22 per cent.
The premium increase of 22 percent for Inner London drivers, this means they now pay the most for car cover, paying £183 more than at this time last year.
This brings the average premium in the region to £1,008 – with prices surpassing £1,000 for the first time in over five years.
Cost of capital: The price of car insurance is rising across the UK, with motorists in London paying the highest prices
Young drivers have seen the biggest increase in car insurance costs, with premiums for 18-year-olds rising by £307, or 22 per cent, over the past 12 months. This brings the average premium for drivers of this age to £1,715 per annum.
Confused.com CEO Louise O’Shea said: “We are living through a financially difficult time.
“And like everything else, auto insurance costs are rising rapidly and that will hit us all hard.”
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Why are car insurance prices rising?
The increase is due to several factors. In part, the rise is a return to pre-pandemic standards. During the worst lockdowns, auto insurance prices fell as insurers paid fewer claims for fewer trips.
The UK’s return to a pre-Covid way of life has led to more car journeys, more theft and accidents and therefore higher premiums.
Regulation is also one of the reasons why insurance costs for motorists are rising. Last January, insurers were banned from a practice known as “price walking.”
Price walking is when insurers charge renewing customers more in order to charge new customers less.
This ban led to premiums beginning to rise for all drivers, despite claims by the Financial Conduct Authority’s regulator that it would save the public £4bn over the next ten years.
However, the FCA made that prediction before the cost-of-living crisis erupted, which is another reason why premiums are rising.
Insurers’ own costs rise and are passed on to their customers. Energy costs and the cost of things like car parts are rising, and this is also the reason for the price increases in car insurance.