New statistics released by the Association of British Insurers (ABI) have shows that car insurance payouts have reached record levels this year. According to the ABI’s data, more than £23 million has been paid out for claims EVERY DAY by motor insurers.
Part of the reason is that costs relating to vehicle theft claims have risen by almost a third this year compared to the first nine months of 2017.
Costs relating to theft claims have surged by nearly a third this year so far compared with the same period in 2017.
An increase in repair bills was also cited by the ABI as a cause of the higher claims payouts.
Car insurance claim payouts cover those for theft, damage to the policyholder’s vehicle, third-party vehicle and property damage and personal injury compensation.
In the first nine months of 2018 car insurers paid out a total of £6.4 billion in claims to motorists and victims of car accidents, which works out to more than £23 million each day. This is up 4% on the same period last year and is now at the highest level since the ABI began collection claims payout data in 2013.
The ABI said the cost of theft claims was up 32% on last year, to a total £272 million in the first nine months of 2018. The number of settled claims also rose, up 11% to 41,000 this year. The ABI suggested that some of this could be due to the rise in widely-reported keyless vehicle crime.
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Car repair bills accounted for £3 billion worth of payouts this year, which is an increase of 5% compared to the first nine months of 2017. The average cost of repairs in 2018 currently stands at £2,137. This rise was linked to the increase in more sophisticated technology in cars such as parking sensors, which costs more to repair.
The ABI’s director general, Huw Evans, said:
“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.”
He went on to say that, despite the rising claim costs, the average price paid for car insurance premiums has actually been falling this year.
The ABI’s own car insurance premium tracker showed that the average cost of comprehensive car insurance in the third quarter of 2018 was £471 – £14 less than it was last year. The tracker also shows that average car insurance premiums have fallen for three consecutive quarters in a row.
Evans said of the decreasing cost of premiums:
“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.”