The average annual price people will pay on their motor insurance has increased in the second quarter of this year.
The Association of British Insurers (ABI) revealed that the typical price for private motor insurance has increased exponentially to £419 - an increase of £5. It also noted that insurers are struggling to cope with the pressures of rising costs.
Despite the rise in price, the latest figure is still £11 lower than it was this time last year. Furthermore, the average premium paid for a new policy in the second quarter was £129 higher than for a renewed policy.
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"Insurers appreciate that these are difficult times for many households dealing with the rising cost of living," said Callum Tanner, the ABI's manager. "While, like many other sectors, motor insurers are facing higher cost pressures of their own, which are becoming increasingly challenging to absorb, they will continue to do all they can to keep motor insurance as competitively priced as possible.”
Meanwhile, average premiums for new policies stood at £500 and average premiums for renewed policies were increased to £371. Motor insurers have begun implementing the Financial Conduct Authority pricing rule changes which has resulted in many insurers struggling to deal with rising costs and supply chain issues.
The ABI noted that a continued global shortage of semiconductors has soared the prices for used cars and more expensive repairs. It also noted that there have been extensive delays in getting some spare parts, increasing the repair time for some vehicles.
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