Motor insurance premiums move up a gear, says ABI

The average comprehensive motor insurance premium has risen 9 per cent to £440 over the past year, says a new report from the Association of British Insurers (ABI).

Motorists are facing higher insurance premiums, said the ABI. Picture: Stephen Mansfield

The ABI’s quarterly motor insurance premium tracker says that in the third quarter of 2016 that has added an extra £38 to the average policy.

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Factors meaning motorists are having to fork out more include a 5 per cent rise in the average bodily injury claim settled so far this year to £10,955; vehicle repair costs that have risen 25 per cent over the past three years; and a two-thirds rise in the rate of insurance premium tax in less than a year.

Rob Cummings, ABI’s head of motor and liability, said such headwinds constituted a “triple whammy” for insurers. He added that the government needed “to urgently consult on the planned reforms to address the compensation culture, and avoid any further hikes in insurance premium tax”.