Has car insurance gone up in 2022?
This article is correct as of 22 June 2022, please be aware that prices and costs quoted in this article may have changed since publication.
Has car insurance gone up in 2022?
The rising cost of living is hitting us all – whether that’s in energy prices, fuel prices or just having to pay more for everyday items. It’d be nice to think that at least one area – car insurance – hasn’t seen a price rise in 2022.
Unfortunately, the answer’s not totally cut-and-dry…
Have car insurance prices gone up or down?
According to the Association of British Insurers (ABI) the average price of car insurance in the first quarter of 2022 was 5% lower than it was in the first quarter of 2021. The ABI says this is the lowest that motor insurance premiums have been since 2015.
That’s despite inflation in general as well as a chip shortage resulting in rising costs for the motor insurance sector.
James Dalton, director of the ABI, said: “Like other sectors, motor insurers face rising costs. While it is going to be extremely challenging for these to be absorbed, insurers are doing all they can to keep prices as competitive as possible as millions of household cope with the cost of living crisis.”
How much does the average car insurance cost?
The figures from the latest Motor Insurance Premium Tracker report by the ABI reveal that the average price that people paid for a comprehensive motor insurance policy in the first quarter of 2022 was £416.
What does the January 2022 FCA regulations change mean?
The change in regulations was intended to halt ‘price walking’. This is where customers who remain with the same company find the cost of their policy increasing year on year, while new customers are offered cheaper quotes.
Removing this loyalty penalty means that insurance firms will now be compelled to offer the same price for the same risk regardless of whether the customer is a new customer or a renewing customer.
As a result of these changes, though, the unsustainably low-priced entry deals will probably go. Intended to lure people into choosing a particular company, many introductory policy offers were below cost and as a result it would be unsustainable to offer them to everybody.
This is reflected in the ABI’s data, which shows that the price of a new policy in the first quarter of 2022 was £34 MORE than it was in 2021, while the price of a renewed policy was £55 less.
Read more about these regulations in our FCA pricing regulations update.
So will my insurance actually cost more?
If you were the sort of person who surfed insurance firms, picking a new introductory offer every year, then the new FCA regulations may actually cost you money. But on the whole, it’s estimated that the removal of these ‘loyalty penalties’ will save consumers £4.2 billion over 10 years.
James Dalton of the ABI commented: “As the FCA has said, the impact of their reforms to pricing rules introduced on 1 January this year could lead to some consumers paying higher prices if they used to benefit from significant new business discounts. For some it could still pay to shop around for the policy that best meets their needs”.
How can I save money?
All the usual ways to save money still apply – by paying upfront, choosing a car in a low insurance group, parking in a low-risk area or raising your excess.
As fuel prices rise higher and higher many are also considering how to drive in order to save as much fuel as possible.
The good news is that if you’re searching for a low price insurance policy you’re in the right place. You can compare policies here at mustard.co.uk.
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