Concerns are mounting regarding the affordability of motor insurance as average premiums climb to nearly £1,000. MPs have been cautioned that certain families are facing "impossible" decisions, being forced to choose between purchasing car insurance or providing food for their households.
According to Confused.com, the average cost of car insurance stands at £941, marking a substantial 43% increase, or £284, over the past year. In January, it reached a peak of £995. This surge in motor premiums over the last two years is attributed to the escalating prices of spare parts, second-hand vehicles, and repair shop labour, all contributing to higher claims costs for insurers. This inflation in claims is fueling concerns about the affordability of car insurance for many individuals, prompting the Commons Treasury select committee to launch an investigation into the issue.
During a committee hearing to investigate the surge in premiums, David Mendes da Costa, a principal policy manager at Citizens Advice, highlighted "a clear rise in the number of people who are seeking our assistance due to being unable to afford insurance."
He noted that the proportion of Citizens Advice advisers indicating that clients had terminated their car insurance had surged from 5% in 2022 to more than 50% last year. He further emphasised that elevated premiums were leading to "impossible choices" for some individuals, as they were compelled to drive to work, manage the school run, or attend hospital appointments.
