Car insurance premiums up 18%

Car insurance has risen by 18% in the last year to an average annual premium of £850.

According to research carried out by Compare the Market, average premiums rose £132 in the 12 months to May.

The largest proportional increases were felt by drivers over the age of 80, who have seen policies jump by 27% (£139), while drivers under the age of 25 has absorbed the sharpest absolute increases with an average rise of £310.

Higher claims costs for insurers, high inflation and increasing costs of parts, labour and energy have been blamed for the sharp rise in motor insurance.

Car insurance

However, there are positive signs for motorists with the average premium falling by £80 month-on-month from April.

Anna McEntee, director at Compare the Market said:

“The substantial cost of car insurance is understandably causing concern for many motorists. Our research shows motor premiums have risen by more than £100 year-on-year. Drivers aged under 24 and over 80 are seeing the steepest increases. Typically, insurers consider motorists in both age groups as more likely to make a claim which could lead them to see higher premiums.”