Broken Britain’s road crisis is damaging vehicles and forcing drivers to pay high car insurance fees

Repairs were found to be a key component behind increased claims costs this year, with figures reaching £2.1billion already.

More expensive repair costs have been driven by a number of factors, including replacement parts, higher labour costs, inflation, and a shortage of skilled technicians.

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Meanwhile, more modern cars with greater tech reliance also play a significant role in expensive repairs. For example, wing mirrors have evolved beyond simple reflective surfaces, incorporating actuators, motors, lights, signals, and sensors to enhance functionality and safety.

Technological advancement has been taking hold of every part of a vehicle, from bumpers to windshields, making modern vehicles more functional but also more costly to repair.

Vehicle theft claims have also contributed to high claims payouts, with the average claim for theft of and from a vehicle standing at £11,300.

One of the biggest issues for vehicles comes from poor states of UK roads, with the ABI calling on the Government to deliver its Road Safety Strategy to protect drivers from damaged vehicles. The Association found that 632,000 claims were settled in the first three months of the year in relation to road problems.

The report also found that the average cost of cover in the first quarter of the year dropped to £589, marking a five per cent decrease from the previous quarter.

While premiums have fallen from their peak, pressure from claims remains high, which has caused insurance prices to only marginally fall.

The Association warned that the Government and regulators must do more to support drivers, including urgent help to address the skills and capacity challenge in the vehicle repair sector.

Mark Shepherd, Head of General Insurance Policy at the ABI, said: "While our latest figures show a drop in average motor insurance premiums, we know the price of cover remains a strain on household finances. Efforts to reduce costs, such as those within our 10 Point Roadmap, have led to some progress, but affordability remains a concern.

"The record claims this quarter underlines that work must continue to address claims costs, for the good of consumers.

"We need the Government to help us do this by addressing the skills and capacity challenge in the vehicle repair sector, improving the UK's roads and delivering its Road Safety Strategy. We also urge the Government not to raise Insurance Premium Tax at the Autumn Budget - a tax that penalises responsible drivers."

The ABI’s plan hoped to tackle certain issues impacting drivers across the UK, including rising vehicle theft, cracking down on insurance fraud and uninsured driving.

Other measures included helping consumers make informed decisions as well as reducing the impact of the Personal Injury Discount Rate. The rate is used to decide the lump sum of damages awarded to people who suffer serious and long-term personal injuries, insurers use these rates to help with payouts.

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In January, HMRC introduced new rates in England and Wales, which could lead to savings of around £50 per year for policyholders.

Mohammad Khan, head of general insurance at PwC UK, suggested the discount rate adjustment would enhance competition within the car insurance market.

"As for the insurance companies, they had expected a change of this scale and will already be pricing it into their pricing," he explained.