Insurance costs are now the highest on record, research from Confused.com has found
By Huw Thomas
Business correspondent, BBC Wales
Drivers are in for a “shock” as insurance premiums are up 40% on last year, according to a comparison site.
Research by Cardiff-based Confused.com has found an increase in claims and more expensive repairs have led to the record rise in costs.
The firm’s boss Steve Dukes said some drivers had already seen “hefty increases in their premium”.
Car insurance now costs an average of £776 a year, up £222 compared to last year and the highest on record.
The news comes as inflation in the UK dropped to 7.9% in the year to June, the Office for National Statistics (ONS) has announced.
Previous figures showed that inflation had stayed flat at 8.7% in April and May.
Confused.com boss Steve Dukes said some drivers will be “surprised” by their renewal costs
A rise in the number of claims since the easing of Covid restrictions has pushed up car insurance premiums, as has the increasing price of car repairs and replacement vehicles.
The Association of British Insurers said last month that the cost of vehicle repairs increased by a third over the course of a year to £1.5bn, the highest figure since it began collecting data in 2013.
Mr Dukes said his price comparison business was seeing “much higher rates of shopping around,” and that there were options for drivers who were faced with soaring insurance renewal costs.
Insurance tips for drivers
From Steve Dukes, CEO of Confused.com:
- Shop around on price comparison websites
- Start searching about three weeks before your renewal is due
- Check that you are not paying for more mileage than you intend to use
- Add a named driver with more experience, if you are young or inexperienced
- Increase your voluntary excess, but make sure you could afford to pay it in the event of making a claim
- Pay for your car insurance annually if you can afford it, as insurers charge interest for spreading the cost over the course of a year
People who need motor insurance for their businesses have also faced steep increases in their renewal costs.
Ice cream man Owen Herbert has frozen the cost of his cheapest Cornetto at £1, despite the rising cost of keeping his business going.
“It did come as a surprise,” said Mr Herbert, from Port Talbot.
“In my experience when renewing insurance, usually it goes down, particularly if you’ve got no claims.
“Even when you go on comparison websites, you see that the price is still increased compared to what we were paying last year.”
Ice cream seller Owen Herbert says he sees “quite a lot of anger” from customers when he raises his prices
In addition to insurance costs, Mr Herbert is dealing with increased costs for ingredients and sauces, while high fuel prices have been a constant concern.
He has been forced to pass on some of his costs to his customers, and not all of them are understanding.
“I get quite a bit of anger from the adults,” Mr Herbert said.
“If they’ve come to the van with four or five children and they see an increase, then I’m the one that gets it in the throat.
“Whereas the big oil companies or the energy companies, they’re invisible to people. You can’t go to them face-to-face and complain.”
