Average cost of motor cover £50 higher than a year earlier
While insurance prices are higher on an annual basis, the average cost of cover has fallen when compared with the previous quarter.
The average price paid for an annual motor insurance policy was £50 higher between July and September than a year earlier, but the pace of price rises is slowing, according to figures from the Association of British Insurers.
The average motor insurance premium was £612 between July and September, which was 2% lower than in April to June but 9%, or around £50, higher than in the third quarter of 2023.
The typical cost of motor cover fell by around £10 in the third quarter of this year compared with the previous three months.
It marks the second quarterly fall in a row.
The annual pace of increases in the cost of motor cover has slowed. In the second quarter of this year, the average cost of motor insurance was 21% higher than the same period in 2023.
The ABI said the year-on-year increase in the cost of motor insurance is due to the significant and sustained cost pressures insurers are experiencing, with record claims costs and broader price inflation.
It said insurers paid out £2.9 billion in motor insurance claims in the third quarter of 2024 – up 14% on £2.5 billion paid in the same period last year.
Repair costs totalled £2 billion, which is 26% higher than the third quarter of 2023.
The ABI’s motor insurance premium tracker analyses nearly 28 million policies sold across the UK per year. It is based on the price customers pay for their cover rather than what they are quoted.
The trade body is working alongside consumer groups as part of a stakeholder panel, advising the Government’s newly-established motor insurance taskforce.
Mervyn Skeet, ABI director of general insurance policy, said: “While our latest figures show the second consecutive quarterly drop in average motor insurance premiums, we know that the industry continues to face significant cost pressures, and the price of cover remains a strain on household finances.
“We remain determined to do all we can to support motorists. As part of this, we’re committed to playing our part in supporting the Government’s taskforce, and we look forward to bringing our ideas and expertise to the table, contributing to this initiative on behalf of our members.”
