The average comprehensive car insurance policy was £462 in the final three months of 2016, as premiums rose to their highest level since records began according to the Association of British Insurers (ABI).
The previous record was in the spring of 2012, when premiums reached £443. The latest rise has been attributed to a rise in Insurance Premium Tax (IPT) – it jumped to 9.5 per cent last year, and will increase to 12 per cent in June – and also the use of increasingly sophisticated technology in cars meaning that repairs are more expensive.
According to the ABI, the average repair bill is £1,678, having increased 32 per cent over the last three years. The weakness of the pound has contributed to spare parts becoming more expensive, which adds to the cost.
“These continue to be tough times for honest motorists,” said Rob Cummings, assistant director and head of motor and liability at the ABI.
“They are bearing the brunt of a cocktail of rising costs associated with increasing whiplash-style claims, rising repair bills and a higher rate of insurance premium tax.
“While we support the government’s further reforms to tackle lower-value whiplash costs, it must not give with one hand and take away with the other. The sudden decision to review the discount rate has the potential to turn a drama into a crisis, with a significant cut throwing fuel on the fire in terms of premiums.”