Is the cost of car insurance going up?
Jason Barker • April 28, 2023
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With the increased cost of living in the UK, many motorists feel they’re paying too much for their vehicle cover. According to Confused.com, the average cost of a car insurance policy in the UK is £629 (as of December 2022). But why is car insurance getting so much more expensive?
- Rising Claim Costs – We have personally experienced supply chain issues and increased costs for parts, leading to a more expensive repair. This is further impacted by insurance companies working against each other. An example of this is where Customer A is hit by Customer B. Insurer A (rather than dealing with the claim themselves) factor the claim out to a claims management company who then overinflate the claim and hire costs, resulting in increased costs for Insurer B. Additionally, the Association of British Insurers (ABI) has suggested that paint and material costs have increased by around 16%, whilst energy inflation has added more than £70 to each repair.
- Increased Technology – A number of more modern, advanced vehicles now benefit from keyless driving and/ or entry. This has led to an increase in car theft and a subsequent rise in insurance premium costs.
- Insurance Premium Tax (IPT) – IPT is levied on most insurances. The standard rate of IPT rose to 12% in 2017, up from 6% in 2015. As a result, an insurance premium of £500 becomes £560 once IPT is added. Coupled with ongoing increases in the cost of living, there is potential that IPT could rise again in the future.
- Accepting Your Renewal Price – Many motorists simply accept their renewal quote each year, without doing any additional research. This results in a high volume of missed savings. Given that many insurance providers increase their prices with inflation each year, the acceptance of such policy costs results in a rise in premiums across the board.
- Overinflated Hire Costs – It is common for customers to be given a courtesy vehicle following an incident. Often, the cost of this is claimed via the third-party insurance company and the costs may be overinflated.
As always, we recommend using the services of a reputable insurance broker to find an insurance policy which meets your individual requirements. Please also visit our blogs ‘How are car insurance premiums calculated?’ and ‘How do I choose the right car insurance company for me?’ for further information.
For many years, CARS of Grimsby has supported motorists with trusted accident repair and vehicle care services. As a family owned and run business, we have always believed that great service comes down to doing the job to the best of our ability, communicating honestly and treating every customer as an individual. Those values have helped us build strong relationships with motorists, insurers and businesses, and they remain just as important to us today. Now, we are preparing to begin an exciting new chapter. Decades of Accident Repair Experience in Grimsby CARS of Grimsby is best known as an established and multi-award-winning accident repair centre, helping customers get back on the road following everything from minor bumps to more significant damage. That work has given our team a detailed and thorough understanding of vehicles and their condition. When you spend years repairing bodywork, checking panel alignment and assessing previous damage, you learn to notice the details that may not always be obvious at first glance. You also learn how important quality, safety and honesty are to motorists. Our team has developed this knowledge through experience, ongoing training and working with a wide range of vehicles over many years. It is experience we are proud of, and it will remain at the heart of the next chapter of CARS of Grimsby.
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