‘Relief’ for motorists as average cost of insurance has fallen by £60 annually
The average cost of motor insurance premiums has fallen by £60 over the past year, according to figures from the Association of British Insurers (ABI).
For the period April to June 2025, the average premium was £562 – down from £622 in the same quarter of 2024.
Average premiums also fell by £19 compared with the first quarter of the year.
The ABI said its members paid out £3.1 billion in car insurance claims during the second quarter of the year.
It said repairs continue to be a major contributor to elevated claims costs.
The increasing sophistication of vehicles, featuring complex electronics, advanced sensors, and integrated systems, has made repairs more intricate and time-consuming, the ABI said.
It added that shortages of skilled technicians, slowing repair times, further inflates costs for insurers.
The high cost of claims for theft has also played a role in the payouts, the ABI said.
The average claim for theft of and from a vehicle increased by £319 compared with the previous quarter, reaching £11,800.
Insurers settled 669,000 claims between April and June, 5% more than 639,000 settled in the first three months of the year.
Mark Shepherd, head of general insurance policy at the ABI, said: “It’s encouraging to see motor premiums have fallen for a second consecutive quarter, offering some much-needed relief to drivers.
“But with the cost of cover still weighing on household finances, we must not lose momentum in tackling the persistent pressures driving up claims.”
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The ABI’s research is based on nearly 28 million policies sold a year and is based on prices paid for cover rather than insurance quotes.
