Cost of motor insurance accelerates to new record high of £485 a year

Premium-increase

Vital that the UK Government implements its proposals to reform compensation pay-outs to help put a brake on rising motor insurance premiums

The cost of the average motor insurance premium has leapt by £45 in the last year to a record high according to the Association of British Insurers’ (ABI) latest Motor Premium Tracker published today (27th October). The ABI Premium Tracker is the only published indicator of the actual premiums paid by customers rather than prices quoted.

With Insurance Premium Tax (IPT) at 12% having doubled in two years, and average repair bills up by a third in the last four years, the ABI urges the Government to implement its proposals to reform personal injury compensation pay-outs – the Discount Rate - as quickly as possible to help give some relief to cash-squeezed motorists.

The ABI Tracker shows that in the third quarter of the year:

  • The average price paid for private comprehensive motor insurance at £485 rose 10% on the same quarter last year, equating to an extra £45.The average premium now stands at its highest since the ABI started tracking average motor premiums paid back in 2012.
  • Average premiums rose by £6 on the previous quarter figure of £4791.an increase of 1%.

Rob Cummings, Head of Motor and Liability at the ABI, said:

“The UK Government’s proposals to deliver a personal injury compensation system that is fair for claimants, customers and taxpayers alike should help ease the pressure on motor insurance premiums. We urge the Government to publish a framework and timetable for making these reforms a reality so that we have in place a system that provides full compensation to claimants and benefits insurance customers, as well as other compensators like the NHS.

“And in the forthcoming Budget, the Chancellor must resist any temptation to further increase the rate of Insurance Premium Tax.”