Auto insurance premiums may be down, but insurers have still paid out record amounts in claims this year.
Figures released by the Association of British Insurers (ABI) revealed that an average of over £23 million has been paid out to motorists every day over the course of 2018.
The total amount that auto insurers have paid out in compensation for the first nine months of the year stands at £6.4 billion. This is up 4% from last year and represents the highest number since the ABI started collecting data in 2013. Pay-outs have covered theft, own-vehicle and third-party property damage, and personal injury compensation.
Reported growth in keyless vehicle crimes have resulted in theft claims increasing by 32% this year, reaching £271 million in total. Meanwhile, a proliferation of more sophisticated vehicle technology, such as sensors in bumpers and windscreens, has led to a rise in repair costs. Repair costs have risen by 5% from last year and now total £3 billion, with the average repair bill at £2,137.
However, a highly competitive market and the prospect of personal injury reforms have helped to keep the cost of motor insurance down, despite the record pay-outs.
“Motor insurers are delivering when it matters, keeping Britain’s motorists on the road when things go wrong, and compensating those who suffer injury in road crashes,” said Huw Evans, director general of ABI.
“Despite rising claim costs, all drivers will appreciate the fact that the average price paid for motor insurance has been falling this year. This in part reflects the continued competitive market, and that some insurers may be reacting to the progress of the Civil Liability Bill that is proceeding through Parliament that will bring much-needed reforms to the personal injury compensation system.”
