Car insurance hike as the average policy tops £1,000

Drivers face shock car insurance increases after the average policy topped £1,000 for the first time in six years.

The average policy is now £1,082 – while under 25s can expect to shell out £2,145.

Quotes for premiums rose 34 percent in the year to May, according to market researcher Consumer Intelligence, the largest since its records began in 2013.

There has been a 14.4 percent rise between February and May and consultancy EY expects another 11 percent rise on average next year.

Meanwhile, the average excess to pay if you make a claim has risen 10.9 percent in a year to £204. Windscreen repair excesses have also risen by 55 percent since 2018.

Richard Reed, of EY, said: “Premiums have remained far below the level needed to keep pace with inflation and the return to more regular motor activity post-pandemic.

“The need to address this and rebalance its books unfortunately means consumers will face a sharp rise in their premiums.”

Max Thompson, of Consumer Intelligence, warned the premium hike could lead to more non-and under-insured drivers.

The Financial Conduct Authority said 13 percent of adults cancelled one or more insurance policies or reduced their cover in the six months to January, to save money.

Industry bosses were grilled by MPs last month about whether it was profiteering after some people were told their cover renewal would rise by hundreds of pounds.

Ross Barrow, 34, of Edinburgh, who has 10 years of no claims, was quoted 85 per cent more to renew his 2021 Seat Ateca insurance…from £242 to £448.

When he complained, he was still charged 38 percent more, so he switched to another provider, which quoted him £269.

Insurers have blamed the increase on more expensive parts, materials, labour and higher repair costs.