The average premiums for motor insurance in the UK rose by 8% in the last quarter of 2022, reaching £470.
The Association of British Insurers (ABI) attributed the rise in prices to a number of factors, including surging energy costs, which reportedly added nearly £72 to every repair bill.
Delays in securing vehicle parts due to supply chain disruptions and increased paint costs were also contributing to the higher repair costs. Additionally, costs for courtesy cars and second-hand vehicles have gone up.
To address these rising prices, the Financial Conduct Authority established new regulations on motor and home insurance pricing in January 2022, aimed at ensuring that renewal prices for existing customers were not higher than those charged to new customers.
Jonathan Fong, senior policy advisor for general insurance at the ABI, commented on the situation saying: "Insurers are doing their best to keep motor insurance as competitively priced as possible, despite facing cost challenges such as more expensive raw materials.
"Every motorist wants to get the best insurance deal, especially in the face of cost-of-living pressures."