Will the price of automobile insurance coverage preserve rising in 2024?
- Drivers have had a tough journey with rising automobile insurance coverage costs in 2023
- But costs are usually not about to fall, specialists say, with extra hikes due subsequent yr
Drivers face paying report excessive costs for automobile insurance coverage premiums – and sadly 2024 doesn’t look prone to deliver any respite, with rises of as much as 10 per cent predicted.
Car insurance coverage premiums rose 29 per cent within the yr to November, reaching a report common excessive of £561.
Insurers say the rising price of substitute components and labour prices had been behind the steep hike in annual insurance coverage costs.
And as new automobiles grow to be extra technologically superior, in addition they grow to be dearer to restore.
Driven up: Car insurance coverage premiums are rising, and drivers could face even larger prices in 2024
Insurers additionally report {that a} scarcity of expert repairers is mountain climbing up the price of claims as repairs take longer to hold out.
This additionally means drivers want courtesy automobiles for longer durations, one other giant price to insurers that’s handed on within the type of premiums.
Insurance premium tax provides 12 per cent to what motorists pay for insurance coverage, piling on the ache as premiums proceed to rise.
But critics of insurers additionally say that the monetary corporations can have a flock mentality and have lengthy been ready for an excuse to boost motor premiums, which have been low for a few years.
David Borland, EY UK and Ireland automotive chief, mentioned: ‘Insurance premiums rising amid ongoing price of residing pressures may current a difficult headwind to the auto sector’s bid to ramp up shopper demand.’
A spokesperson for the Association of British Insurers wouldn’t touch upon the extent of motor insurance coverage premiums in 2024.
Going up: Figures present the price of automobile insurance coverage has risen lately
When will automobile insurance coverage premiums fall once more?
Motor insurance coverage prices will start to drop when falling inflation filters by insurers’ provide chains.
Inflation in November 2023 was 3.9 per cent, in line with the Office for National Statistics, down from 4.6 per cent the month earlier than.
EY UK insurance coverage chief Martina Neary mentioned: ‘While many shoppers anticipated premiums to rise, the extent and tempo of the rise is way larger and sharper than many anticipated.
‘The present financial surroundings is in fact tough for each shoppers and for corporations however as inflation begins to fall again, circumstances for shoppers and insurers alike ought to enhance.’
