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Average motor insurance premium falls to five-year low

·1 min read

The average cost of motor insurance has fallen to a five-year low as coronavirus lockdowns have led to fewer claims, according to insurers.

Drivers are paying £430 on average for comprehensive cover – the lowest figure since the first quarter of 2016 – the Association of British Insurers (ABI) said.

The ABI’s tracker looks at the price people pay for cover rather than the price they are quoted.

The £430 average recorded in the second quarter of this year is £6 lower than the previous quarter and £30 (7%) lower than the same quarter in 2020.

The average premium has fallen by £38 since the fourth quarter of last year.

The fall in part reflects insurers passing on cost savings from fewer claims during lockdowns, with fewer vehicles on the roads, the ABI said.

It added that insurers still face the continued cost pressures of rising repair bills.

Laura Hughes, the ABI’s manager of general insurance, said: “The fall in the average motor premium clearly shows that millions of drivers continue to benefit from cost savings made by insurers during the lockdowns.

“It will be interesting to see if there is a rise in motor claims as we emerge from the pandemic and road traffic continues to increase.

“We will also be watching closely the impact of the Official Injury Claims portal launched in May which will simplify the whiplash claims process, while ensuring proportionate compensation for genuine claimants.

“And while underlying cost pressures around rising repair bills will remain, the market will stay competitive, enabling motorists to shop around for the best deal for their needs.”

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