UK motor insurance premiums soar to record high
30 October 2023
In recent years, the landscape of the motor insurance industry in the United Kingdom has undergone significant transformations. It’s a trend that has left many drivers feeling the pinch in their pockets. According to the Association of British Insurers (ABI), the average price of motor insurance has surged to an all-time high due to sustained cost pressures on insurers.
We highlight the main reasons behind this unwelcome trend and offer insights for policyholders.
The ABI’s recent report highlights that insurers are grappling with a number of factors that are driving motor insurance premiums to unprecedented levels:
Rising repair costs
In the UK, vehicle repair costs have been steadily climbing. Advanced safety features and technology in modern cars, while enhancing safety, have also led to pricier repairs. Additionally, the pandemic’s disruptions to supply chains have caused parts shortages, further driving up costs for repairs and replacements.
Changes in government policy
Government policy variations have also played a role in this surge. The adjustment in the way personal injury compensation is calculated, known as the Ogden Rate, has increased the size of lump-sum payments insurers are required to make. This shift, although aimed at providing fair compensation to accident victims, has added to the industry’s financial burden.
Increase in fraudulent claims
Another pressing concern is the growing issue of fraudulent claims, which place a significant burden on insurers. These claims not only lead to higher payouts but also drive up administrative and investigation costs.
For policyholders, it is essential to understand these factors. While the industry faces challenges, Hazelton Mountford Insurance Brokers is committed to helping clients navigate this evolving landscape. We offer tailored advice and solutions to ensure that our clients receive the best coverage and value for their motor insurance.
Contact us today to discuss how we can help you secure the most competitive motor insurance coverage in these challenging times.