Millions of drivers will have £157 wiped from bank account under UK law

The average cost of UK car insurance has skyrocketed by one-third in a year, analysis has found. The average price paid for comprehensive motor insurance was around a third (33%) or £157 higher in the first quarter of this year than a year earlier.

The typical price paid in the first quarter of 2024 was £635, marking a 1% increase on the previous quarter, the ABI said. In the first quarter of 2023, the average premium paid for private comprehensive motor insurance was £478.

Mervyn Skeet, the ABI’s director of general insurance policy, said: “We understand that car insurance costs are putting pressure on household finances. These figures show how competitive the motor market is, with insurers absorbing significant cost rises but keeping prices relatively stable."

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You must have motor insurance to drive your vehicle on UK roads. Third party insurance is the legal minimum. This means you’re covered if you have an accident causing damage or injury to any other person, vehicle, animal or property. It does not cover any other costs like repair to your own vehicle.

Skeet went on: “Even though these figures demonstrate a slowdown in price increases, we won’t be taking our foot off the gas when it comes to our work on tackling the cost of cover.” Earlier in April, the Treasury select committee member Dame Angela Eagle told a hearing on insurance: “My constituents and many people who write to the committee feel that insurance is becoming more of a rip-off.

“Because the price is going up, it’s harder to make a claim; people, when they do make a claim, often have to wait a very long time or aren’t dealt with very fairly. And that’s particularly the case for insurance that’s compulsory, such as driving insurance.”

Charlotte Clark, the ABI’s director of regulation, said the price rises were because “it’s coming off the back of the pandemic, where motor insurance in particular was reduced quite significantly, because the risks of being in a car accident when you’re at home are quite low”.

Matt Brewis, the director of insurance at the Financial Conduct Authority, said the regulator was meeting with price comparison websites, brokers and consumers “to understand the concerns of consumers and where they are seeing issues”.