Average motor premium paid rose by 9% in 2017 to a record high, adding an extra £40 to the average motor insurance policy.
Urgent reform to compensation pay-outs needed to help put the brakes on rising premiums.
The relentless rise in the cost of motor insurance continues with the ABI’s latest Motor Insurance Premium Tracker out today showing that the costs of motor insurance have reached record levels.
The ABI’s Premium Tracker - the only market survey which measures prices consumers actually pay for their motor cover, rather than quotes - shows that in the fourth quarter of 2017:
The average price paid for private comprehensive motor insurance was £493. This was the highest quarterly figure since ABI started collecting the data in 2012, up 6% on the same quarter 2016.
The average premium paid over the whole of 2017 at £481 was 9% higher than the previous year, and the highest since ABI started collecting this data back in 2012. This added an extra £40 to the average premium.
The average cost of motor cover has leapt by 29% since 2014.
The ABI is urging the Government to help reduce the cost of motor insurance by:
- Introducing as quickly as possible its reforms to how compensation for large personal injury compensation awards is adjusted (known as the Discount Rate) to ensure a fairer system for claimants and insurance customers.
- Push ahead with reforms to how lower value whiplash-style claims are handled. Since 2013 there has been a rise in these claims reported to the Government’s Compensation Recovery Unit.
- Freezing the rate of Insurance Premium Tax, which currently stands at 12%.
Rob Cummings, ABI’s Assistant Director, Head of Motor and Liability, said:
“The rising cost of motor insurance shows no sign of abating. Changes to how compensation pay-outs are calculated, Insurance Premium Tax, more whiplash-style claims and rising repair bills are all piling on the pressure for cash-strapped drivers.
“The Government must urgently bring forward relief for motorists by introducing its reforms to create a fairer compensation system, and tackling low value whiplash style claims without delay, as well as freezing Insurance Premium Tax. It is time cash-strapped motorists got a break.”