Why your car insurance price might have increased
We know it's frustrating that your car insurance price can increase even if you haven’t had an accident or made any changes to your policy. This can feel even more unfair if you’ve been driving for a long time and have a good claims history. Unfortunately, other factors which you cannot control have an impact on car insurance prices.
Inflation
The cost of running your home has probably gone up due to inflation, which affects things like energy prices, insurance companies. Our suppliers are also feeling the impact. Inflation has led to an increase in the prices of labour to fix vehicles, secondhand cars and parts. This has pushed up our costs, and as a result, insurance prices have also gone up.
Repair costs
Modern cars have advanced safety features and technology, which makes them more expensive to repair. The cost of repairs has increased 32% in the third quarter of 2023 to a quarterly record of £1.6 billion, according to the Association of British Insurers. Rising operational costs, taxes and energy are the biggest 3 factors. The increased cost of spare parts and workforce shortages complete the top 5.
Climate-related events
Climate events have added uncertainties into the insurance industry. Severe weather has become more frequent in the UK, such as Storm Bert in November 2024. These have resulted in more claims for vehicle damage and higher costs for insurers.
Car theft
Freedom of Information data obtained by Co-op Insurance highlights a 28% rise in vehicle thefts between 2022 and 2023, which increases the number of claims. There could have been more crime in your area since your last quote which means the risk of your car being stolen or damaged is higher.
Summary
These are just some of the reasons behind the costs. In 2023 it has been estimated that for every £1 paid for policies, the industry paid out £1.13 in claims and expenses.
The car insurance industry is taking this seriously, as are the regulator and the government. As of October 2024, there is a new government taskforce which is looking into rooting out factors that increase costs and seeking to agree solutions that keep these under control.
Your insurance payment goes into a central pot. Most of the money is used to help those who need to make a claim, after an accident. So, when claim payouts increase, it results in a rise in everyone's insurance price to cover the costs. Obviously, no one likes prices going up, but without doing this, there wouldn't be funds to payout when you or any other policy holders need us most.
Concerned about making payments
We understand that other costs are rising as well, putting pressure on many households. If you are struggling to pay your Co-op Car Insurance, please contact us as soon as possible.
We have specialists on hand who can discuss your circumstances and agree on how we can help you.
Existing customers
If you're one of our existing customers we're here to help.