Motor insurance premiums appear to be on an unpredictable path after prices shot up in January due to regulatory changes, according to the latest motor insurance price index from Consumer Intelligence.
The average motor insurance premium has increased 7.8% over the first five months of 2022, with the typical policy now costing £786 following the introduction of new rules to tackle the practice of ‘price walking’ at the beginning of this year.
While January is the culprit for the biggest one-month increase, underlying inflation is now causing a further uptick in the average premium. Mike Miskelly, insurance insights manager at Consumer Intelligence, explained: “Whilst we continue to see varied strategies at a brand level, we are starting to see signs of inflation taking hold with a further uptick in premiums for new business customers.”
“As we predicted earlier this year, this was inevitable considering the enormous upward pressure from claims costs and repairs. It was only a matter of time until we saw this come through at a market level.”
He continues, “Right now the market is behaving in two very different ways—prices are going up for new business customers and for renewing customers, they are going down. Making a claim, moving house, buying a new car or mid-term adjustments could be the deciding factor in which side of the coin a customer will fall. Customers forced back out into the new business market right now may feel frustrated by the quotes they get.”