- Car insurance prices are up 25% in a year and 70% in ten years
- But insurers have published new figures that aim to defend the steep hikes
Car insurers have spoken out to defend record high premiums, with the typical driver paying £543 a year in 2023.
The average 2023 motor premium rose 25 per cent from £434 in 2022, the Association of British Insurers said, hitting a peak of £627 in the final three months of the year.
Overall, the average driver now pays 70 per cent more to insure their car than they did 10 years ago – £627 now versus £370 in 2013.
But the ABI has now defended these insurance price increases with a fresh breakdown of why insurers are putting up premiums.
Up and up: This shows how car insurance premiums have risen since the start of 2022
The ABI’s latest motor insurance claims tracker said that motor insurers paid a record amount in claims in 2023, an average of £1.13million every hour, or £9.9billion in total.
The trade body said this was the highest figure since it started recording claims data in 2013, and a rise of 18 per cent on the £8.4billion paid out in 2022.
Motorists are also claiming more, the ABI said – with 2.3million settled claims in 2023, up 10 per cent on 2022.
Vehicle repair costs rose 31 per cent, from £4.7billion in 2022 to £6.1billion in 2023.
Meanwhile, theft claims also rose in 2023, the ABI said. In 2022 insurers paid out £543million in these claims, rising 23 per cent to £669million in 2023.
Insurers also said the cost of providing replacement cars rose 35 per cent, from £444million in 2022 to £597million in 2023.
ABI manager, general insurance policy, Jonathan Fong said: ‘Significant and sustained cost pressures faced by insurers, such as a 31 per cent rise in repair costs over the last year, have impacted on the cost of cover.
‘Despite this, insurers continue to do all they can to ensure competitively priced motor insurance. Through our recently published Roadmap, the industry is working hard to combat rising motor insurance costs.
‘And it can still pay to shop around to get the policy that best meets your needs at the most competitive price.’