"When dealing with claims, insurers are wrestling with increased costs for parts and labour due to inflation. Supply chain problems stemming from the pandemic also continue to cause delays in car repairs, this adds to the cost of claims. As if that wasn’t enough, modern cars with advanced technology are more expensive to repair or replace. So overall, the combination of higher claims costs, supply chain issues, and general inflation is pushing up car insurance prices."
A report from Association of British Insurers (ABI) backs this up. It shows that insurers paid out over £2.5 billion in motor insurance claims in Q2 of 2023. This is an 18% increase on Q2 2022 and the highest quarterly figure since the ABI started collecting data in 2013.