Labour vows to tackle cost of car insurance

Shadow transport secretary Louise Haigh has pledged that a Labour government will tackle rising motor insurance premiums.

During her address at the Labour Party conference, Haigh told attendees that the party would “crack down on unfair car insurance fees hitting people hard” and setup a new watchdog to drive down fuel prices.

It came as data from WTW and Confused.com showed that motor premiums reached a record high in the last year.

The figures, which were published today (13 October 2023), showed UK motorists were now paying £924 on average for premiums, some £338 more than 12 months ago.

This meant car insurance premiums reached their highest ever recorded levels since the two firms launched their Car Insurance Price Index in 2006.

“Labour will support drivers with a laser-like focus on the cost of living, saving them up to £685 a year,” Haigh said.

“Labour will take action on unfair practices pushing up car insurance costs and set up a tough new fuel watchdog to tackle rip-off prices.”

Inflation easing?

While car insurance premiums have been rising, data has also suggested that inflationary pressures were easing, which could in turn bring them down.

For example, the Bank of England is forecasting that inflation will fall to 5% by the end of the year, before continuing to fall over the course of 2024 and finally hitting its long-term target of 2% sometime in the first half of 2025.

Meanwhile, WTW and Confused.com also revealed a slowdown in premium increases through the third quarter of 2023.

While they rose by £149 in total, monthly increases for July, August and September sat at 7.5%, 6.6% and 4.1% respectively.

Tim Rourke, UK head of P&C pricing, product, claims and underwriting at WTW, said: “The latest monthly data suggests that the cycle of this challenging market may now be peaking, signalling some relief for drivers in 2024.

“If inflation continues to slow next year, with the cost of second-hand cars and repairs stabilising, this may feed through to less price pressure.”