Cost of car insurance falls to five-year low
The price fall means the average cost of motor insurance has dropped to its lowest level in five years, as drivers benefit from costs savings made by insurers during the pandemic lockdowns.
The ABI’s Motor Insurance Premium Tracker looks at the price consumers pay for their cover, rather than the price they are quoted.
The latest tracker found that the average price paid for comprehensive car insurance in the second quarter of this year was £430. This was down £6 on the previous quarter, and down £30 (7%) on the same quarter in 2020.
Over the first six months of this year the average motor premium fell by £38 compared to Q4 2020. The current average car insurance premium of £430 is the lowest the figure has been since Q1 2016.
The falls reflect insurers passing on cost savings from fewer claims settled during lockdowns, with fewer vehicles on the roads.
Laura Hughes, the ABI’s manager for general insurance, said: “The fall in the average motor premium clearly shows that millions of drivers continue to benefit from cost savings made by insurers during the lockdowns. It will be interesting to see if there is a rise in motor claims as we emerge from the pandemic and road traffic continues to increase.
“We will also be watching closely the impact of the Official Injury Claims portal launched in May which will simplify the whiplash claims process, while ensuring proportionate compensation for genuine claimants.
“And while underlying cost pressures around rising repair bills will remain, the market will stay competitive, enabling motorists to shop around for the best deal for their needs.”