Motor insurers paid out a file £11.7 billion in automobile insurance coverage claims in 2024, with the typical price of canopy paid by drivers rising by £78 yearly, in line with information from the Affiliation of British Insurers (ABI).
The physique stated rising theft and restore prices are persevering with to have an effect on premiums.
The typical price of motor cowl throughout 2024 was £622 – 15%, or £78, larger than 2023.
However there have been indicators of insurance coverage prices for drivers edging down in current months.
The typical worth paid by motorists for canopy within the closing quarter of final yr was 2%, or £14, decrease than initially of the yr.
The standard price paid for canopy within the closing quarter of final yr was £621, down from £635 within the first quarter of 2024.
Complete claims payouts for privately-owned automobiles have been 17% larger in 2024 in contrast with 2023, in line with the ABI, and the very best because it began accumulating the information in 2020.
Our newest information paints a troublesome image for drivers and the trade alike
Mark Shepherd, Affiliation of British Insurers
Throughout 2024, insurers handled 2.4 million motor insurance coverage claims, paying round £4,900 per declare on common throughout the yr and a file common excessive of £5,300 within the closing quarter of final yr.
Automobile restore prices totalled £1.9 billion within the fourth quarter of 2024, taking the yearly complete to £7.7 billion – one other file excessive and £1.5 billion greater than the full for the yr 2023, the ABI stated.
The ABI has beforehand set out a “street map” with urged steps that the trade and authorities can take to sort out insurance coverage prices. It stated it’ll proceed to collaborate with members, associate organisations, regulators and the Authorities to construct on progress.
The ABI stated tackling expertise and capability challenges within the automobile restore sector and enhancing the UK’s roads would even be steps that might assist fight excessive prices.
Mark Shepherd, head of common insurance coverage coverage on the ABI, stated: “Our newest information paints a troublesome image for drivers and the trade alike. By means of our 10-point street map, we’ve been working arduous to assist sort out the price of motor insurance coverage and we’ve seen progress in some areas, with common premiums having fallen from their peak.
“Nonetheless, we recognise that the worth of canopy stays a pressure on family funds while the trade faces important price pressures.”
He stated it’s “important” that insurance coverage premium tax (a tax paid by insurers which feeds into costs paid by customers) just isn’t elevated, including: “We look ahead to persevering with to work with the Authorities and wider sector to assist help drivers and sort out claims prices.”
