Cost of motor insurance in 2021 was at a six-year low
Cost of motor insurance in 2021 was at a six-year low against backdrop of increasing cost pressures
According to the ABI’s latest Motor Insurance Premium Tracker the average price paid by motorists for their motor insurance in 2021 fell to its lowest level in six years. However, there is evidence that sustained cost pressures are beginning to impact the cost of cover.
The rise in the average motor insurance premium paid in the last quarter 2021 highlights that continued cost pressures on insurers could be starting to filter through into the cost of cover.
Between 2015 and 2020 the average amount paid for damage to policyholders’ vehicles increased by 59% and the average paid to third parties for damage to their vehicles rose by 32%.
With road traffic returning to pre-lockdown levels, claims are expected to rise.
The introduction on 1st January of rule changes by the FCA to the pricing of motor and home insurance could lead to some consumers paying higher prices if they currently benefit from significant new business discounts.