Which kinds of auto insurance exist?
Three primary categories of auto insurance policies exist:
Third party: the bare minimum required by law, offering the least degree of security. It pays for expenses if the policyholder is at fault for another person’s injuries or car damage.
Third party fire and theft: This type of insurance covers not only the policyholder but also third parties in the event that the policyholder’s vehicle is damaged, stolen, or destroyed in a fire.
Comprehensive coverage is the highest level available; it includes coverage for medical costs, accidental damage to the driver’s own vehicle, theft or damage to property belonging to third parties, and fire and theft protection.
What is the number of claims made on auto insurance?
According to figures from the Association of British Insurers, insurers settled £9.9 billion worth of vehicle insurance claims in 2023. Since the data was first collected in 2013, this was the highest annual total.
Compared to the £8.4 billion paid in 2022, the amount was up 18%. At 2.3 million, the total number of settled claims increased by 10% from 2022.
From £4.7 billion in 2022 to £6.1 billion in 2023, the cost of car repairs jumped by 31%. According to the ABI, this was a reflection of ongoing cost hikes, with some insurers citing additional increases of 15% for labor and 16% for materials. In contrast, the cost of energy for certain garages increased by 300% in 2023.
In 2023, the average theft claim as well as payouts for theft of and from vehicles reached all-time highs. In 2022, insurers disbursed £543 million; in 2069, they paid out £669 million, a 23 percent increase. This was the largest theft-related car claim on record, together with the average of £12,600.
The amount spent on courtesy cars for drivers whose automobiles were towed after a claim totaled £597 million, a 35% increase over 2022. Since the beginning of the data collection, this has been another annual record.
Insurance companies paid out £2.4 billion for personal injury claims last year, an 8% decrease from £2.6 billion.
According to the ABI, since 2014, average premium hikes have not kept up with the average cost of a car insurance claim when adjusted for inflation.
According to ABI data, the average total cost of a settled auto insurance claim went from £3,500 in 2014 to £4,300 in 2023—a 23% rise. The average premium increased by 8% throughout that time, from £505 to £543.1.