The average price of a car insurance premium has surged by 67 per cent in a year, new research has shown, as experts warn that prices could continue to rise further.
The 67.2 per cent rise marks the highest annual increase on record, narrowly beating the 61 per cent rise in the year to August 2023.
Research from Consumer Intelligence suggests that there are signs of a slowdown given that quoted premiums rose 10.6 per cent in the three months to November.
While this is still a significant increase in prices, it is lower than the 22 per cent rise in the three months to August and the 15.2 per cent increase before May.
Drivers of all ages are being affected by the car insurance hikes
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Drivers most commonly received a quote between £500 and £749 in November, with around 21 per cent of quotes falling in this price range.
The huge jump in costs for motorists stems from insurers paying out a record £2.54billion in the third quarter of 2023 for claims.
The Association of British Insurers highlighted the impact of Storm Babet battering the country and causing massive issues in Scotland and the East Midlands, which resulted in higher premiums.
Max Thompson, insurance insight manager at Consumer Intelligence, commented on the massive insurance premiums and what drivers can prepare for.
He said: “During the last quarter small increases in telematics competitiveness were observed across all the age groups of one to two per cent.
“However, motorists across all age groups and all over the country are seeing major increases in quoted premiums.”
Younger drivers experienced the biggest rises in quoted premiums of 73 per cent, compared with 57 per cent for over-50s and 63 per cent for drivers between 25 and 49.
Data from Confused.com found that 18-year-old drivers are being charged an astonishing £2,995 for one year of car insurance, more than triple the average price of a 39-year-old.
The average overall quoted premiums have more than doubled by 124.4 per cent since October 2013.
Aside from London and the East Midlands, drivers in London saw their premiums increase by 77 per cent and the South East of England saw a 71.3 per cent jump.
The latest newsletter from Martin Lewis has warned drivers that car insurance rises are likely over the course of “at least the first half of the year”.
Car insurance prices rose by 67 per cent in 2023 and the money saving expert is cautioning drivers that prices could get even worse this year.
Martin Lewis has urged motorists to check their policy as soon as possible to see if they can save money by changing their insurer, using comparison tools.
A driver, Chris, wrote to the MSE Money Tips newsletter, saying: “I received the weekly email and was settling for my £968 renewal premium, a hike of £330 on last year's.
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The impact of Storm Babet has caused car insurance prices to rise
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“However, after using the Compare+ tool I managed to get a like-for-like deal for £668, effectively saving me £300. Thank you for the weekly email and the link to Compare+."