Drivers received billions in car insurance payouts last year despite the price of premiums rising to unprecedented levels with roughly £1.13million paid every hour.
Insurers across the UK paid out a total of £9.9billion in claims for incidences on the roads, car damages and thefts.
The total payout was 18 per cent higher than in 2022 where £8.4billion was paid back to drivers. Equally, the number of claims settled was 10 per cent more at 2.3 million, than in 2022.
The cost of vehicle repairs was up 31 per cent to £6.1billion last year as drivers faced harsher conditions on the roads due to more potholes being left unchecked.
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Insurers paid out millions for vehicle theft and personal injury claims
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Jonathan Fong, manager for general insurance policy at the Association of British Insurers, said: “Significant and sustained cost pressures faced by insurers, such as a 31 per cent rise in repair costs over the last year, have impacted on the cost of cover.
“Despite this, insurers continue to do all they can to ensure competitively priced motor insurance.
“Through our recently published roadmap, the industry is working hard to combat rising motor insurance costs.
“And it can still pay to shop around to get the policy that best meets your needs at the most competitive price.”
With insurers paying out more in claims last year, it impacted the price of cover, with the average price paid for motor insurance in 2023, at £543, 25 per cent more expensive than in 2022.
This reflected continued rising costs due to inflation, with insurers reporting increases for materials, and labour, ABI detailed.
Payouts for vehicle theft and average theft claims were both at record levels with £669million being paid out in 2023, a 23 per cent increase from the £543million paid in 2022.
The DVLA recorded a total of 64,087 cars were reported stolen but according to the Office of National Statistics, there were 130,389 vehicles stolen in 2022, compared to 104,435 during the previous year.
Car insurance prices last year jumped by roughly 25 per cent with London being hit worseGo.CompareThe average claim for a stolen vehicle was roughly £12,600, making it the largest payout of this type on record.
Meanwhile, insurers paid out £2.4billion in personal injury claims, which was eight per cent less than in 2022 which saw a total of £2.6billion head back to drivers.
The price of car insurance this year however, has hit unaffordable heights with the cost of an average car insurance premium up by 46 per cent year-on-year.
In the past 12 months, the cost of car insurance in Inner London has increased by £599 (59 per cent), with drivers now paying £1,607, on average.
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Cost of car insurance in Inner London has increased by £599
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For drivers in outside of London, prices are up to £1,291, on average an increase of £483 compared to this time last year.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
