UK motor insurance prices have soared to a record high, with the average premium in the second quarter up 7% from the first and 21% from a year earlier.
Insurers say the rise in prices reflects upward pressure on costs of repairs, theft and injury claims, replacement parts and wages.
The average premium paid for private comprehensive motor insurance was £511 for the second quarter of the year, the Association of British Insurers said, which was the highest since it started collecting the data in 2012.
Average prices paid by motorists renewing their cover rose by £36 or 8.3% on the previous quarter to £471, while the average premium for a new policy was up £21 or 3.9% to £566.
Rival data showed average premiums rose by 48% on average in the 12 months to June 2023, according to insurance price benchmarking experts Consumer Intelligence, which gathers quotes from Confused.com, Go Compare, Compare the Market and MoneySuperMarket.
Motor insurance inflation was 43.1% in May, according to recent data from the Office for National Statistics (ONS), far outstripping overall inflation of 8.7%.
The difference in the figures is that ABI looks at what customers pay for insurance - not what they are quoted.
The ABI pointed to a report from Ernst & Young earlier this year that warned last year was the worst in a decade for insurers due to rising costs; with every £1 received by motor insurers in premiums they paid out £1.10 in claims and operating costs.
EY forecast that premiums would rise 16% by the end of 2023.
Catherine Carey at Consumer Intelligence told the Independent that as a result of inflation and lagging premium increases in 2022, the motor insurance market reported large losses. “Insurers are now adjusting prices to recoup these losses and reflect the ongoing impact of inflation.”
ABI director of general insurance policy Mervyn Skeet said: “We would urge anyone concerned about being able to afford their insurance to speak to their motor insurer to see what options might be available.”
He noted that motorists can still shop around for competitive prices.