Business In News
Rising paint prices and higher energy costs were among the reasons for a leap in the cost of motor insurance late last year, a trade body has said.
The average price paid for cover rose by 8% in the final three months of the year, compared with the previous quarter, the Association of British Insurers (ABI) said.
The typical premium of £470 was up 7% on the last three months of 2021.
Repair and courtesy car costs were factors in the increase, the ABI said.
The rise in the cost of paint and the jump in energy prices were among the factors that made vehicle repairs cost more, the trade body said.
Jonathan Fong, senior policy adviser of general insurance at the ABI, said: “Every motorist wants the best insurance deal, especially when coping with cost-of-living pressures, and insurers continue to do all they can to keep motor insurance as competitively priced as possible.
“Yet, like many other sectors, insurers continue to face higher costs, such as more expensive raw materials, which are becoming increasingly challenging to absorb.
“Anyone concerned about being able to continue paying their motor insurance premium should speak to their insurer about any alternative payment options that may be available.”
The price paid for renewing an existing motor insurance policy was typically £428, the ABI said, whereas the average price paid for a new deal was a record high of £531.
Rules introduced by the City regulator, the Financial Conduct Authority, in January are designed to ensure people who are loyal to the same insurer are not penalised for doing so.
The rules state that the price paid by renewing customers for motor and home insurance is no greater than the price charged to an equivalent new customer for the equivalent policy bought through the same distribution channel, such as via an insurer, broker or price comparison website.
Car insurance costs pushed up by paint and energy prices