Why has my car insurance increased so much this year?
My insurance premium has doubled in 12 months, for a Toyota Touring 2.0 Hybrid. I am 74, with 57 years driving and a clean licence, as well as being an IAM member. The premium for a friend who also drives a Hybrid has doubled in the last year. I am told by my insurer it is because of an increase in the cost of spares. Is that true? And why have premiums increased so much, or am I alone?
Asked on 20 September 2023 by David Pollard
Answered by
David Ross
Thank you for your message. Unfortunately car insurance premiums are increasing significantly at the moment and we are hearing from many people in a similar situation who have discovered big increased in their premium renewal, even when shopping around. The insurance industry is blaming rising inflation and higher costs for vehicle repairs.
The latest car insurance price index showed that motorists are now paying an average of £776 for their car insurance, following an 18% increase in prices over the past three months.
Prices have risen by £222 (40%) compared to 12 months ago, marking the biggest price increase on record. The average premium is now 49% more expensive than it was two years ago.
Due to a shortage of new cars, used cars are retaining their value better, resulting in higher costs for insurers to cover write-offs or total losses. Additionally, the increased value of new cars, especially electric cars, thanks to expensive standard features and options, is leading to higher payouts for insurers when replacing these vehicles.
The latest car insurance price index showed that motorists are now paying an average of £776 for their car insurance, following an 18% increase in prices over the past three months.
Prices have risen by £222 (40%) compared to 12 months ago, marking the biggest price increase on record. The average premium is now 49% more expensive than it was two years ago.
Due to a shortage of new cars, used cars are retaining their value better, resulting in higher costs for insurers to cover write-offs or total losses. Additionally, the increased value of new cars, especially electric cars, thanks to expensive standard features and options, is leading to higher payouts for insurers when replacing these vehicles.
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