Average Insurance Premiums Soaring: What’s Behind the Increase?

Are you feeling the pinch when it comes to your insurance premiums? You’re not alone. Recent data shows that households are paying an average of £635 for insurance, with prices continuing to climb higher despite inflation more than halving.

According to Consumer Intelligence, the average quoted price of home insurance rose by 41.6% in the 12 months to April, marking the highest yearly increase since 2014. Householders in London saw the largest increase in home cover quotes, followed by those in the South East and East of England. Overall, quoted premiums have risen by 68.8% since February 2014.

When it comes to car insurance, drivers saw premiums increase by 25% in 2023 compared to the previous year. The ABI launched an action plan to address the rising costs, with motorists paying an average of £635 in the first quarter of 2024.

So, what’s driving these insurance costs up? Factors such as repair costs, longer repair times, and weather-related damage are all contributing to the rise in premiums. Insurers are spending more on claims and costs than they are collecting in premiums, leading to higher prices for consumers.

If you’re struggling to afford your insurance premiums, you’re not alone. Research shows that some people are being charged high interest rates to pay monthly, leading to financial strain for many. The regulator has called paying for insurance monthly a “tax on being poor,” highlighting the disproportionate burden on those who can’t afford to pay annually.

In conclusion, rising insurance premiums are a growing concern for many households. Understanding the factors driving these increases can help consumers make informed decisions about their coverage. Stay informed and shop around for the best deals to ensure you’re getting the coverage you need at a price you can afford.