Premium prices spike 29% in third quarter

Motor insurance premiums have risen to £561 in the third quarter of the year, according to data from the Association of British Insurers.

This represents a 29% increase on the same period last year and is nine per cent higher than the second quarter of 2023.

Premium increases have been attributed to a 16% rise in the cost of paint over the last 12 months, an 11% rise in spare part prices and inflation of 46% for other costs.

The ABI is now appealing to the government to reduce IPT in the Autumn Statement, which accounts for up to 12% of all premiums.

Mervyn Skeet, ABI Director of General Insurance Policy, said, “We appreciate that another quarter of increased motor insurance premiums will be concerning for households who are already grappling with rising costs in other areas.

“Insurers continue to do all they can to keep motor insurance as competitively priced as possible, despite facing substantial increases in costs outside of their control. We’re bringing together representatives from across the sector to discuss issues such as vehicle safety and security. However, the government could help drivers with an immediate reduction in costs by reducing Insurance Premium Tax.”