The UK’s car insurance industry is seeing an alarming rise in premium prices, according to Consumer Intelligence.
In the past year, the average quoted premium has increased 34%, with the most recent quarter alone seeing a 14.3% rise.
Concerns have been raised about the scarcity of affordable deals in the market for customers, which disproportionately affects younger drivers. Insurance premiums for people under the age of 25 have increased 28% in the last year, Consumer Intelligence reported.
Despite the smallest percentage increase among all age groups, the average quoted premium for under-25s remains significantly higher at £2,145, compared to £850 for the 25 to 49 age group and £568 for the over-50s.
Telematics policies, which are typically a haven for lower-cost quotes and are preferred by younger drivers, have seen their competitive share fall from 33% to 30% in the last year, indicating a drying up of lower-cost insurance deals.
Max Thompson, insurance insight manager at Consumer Intelligence, commented: “The motor insurance market is witnessing unprecedented premium inflation.
“The sudden disappearance of lower-priced deals poses a particular threat to younger drivers, who are already paying higher-than-average premiums.”
Consumer Intelligence is concerned about the potential impact of the increases on road safety. The lack of affordable options may discourage younger drivers from purchasing insurance, leading to an increase in the number of uninsured drivers or forcing illegal practices such as ‘fronting’.