You’ve made no claims... so why IS your home and car cover shooting up?

SOaRING car and home insurance bills are the latest sting for struggling families as the cost- ofliving crisis continues to bite. Motor policies are £51 more expensive than last year, on average. It’s even worse for young drivers, who face rises of £100 or more, researchers found.

Meanwhile, home insurance premiums are up by 6 pc typically, from £178 for a year’s cover to £189. and these are just average rises, with some households reporting that costs have doubled.

experts say rocketing premiums are largely down to inflation pushing up the cost of claims — and more accidents after road traffic grew post-pandemic.

But as household bills balloon, there are fears desperate customers may be tempted to cancel vital cover altogether. Just this month the Financial conduct authority warned that some people could be left without a safety net.

Matthew Upton, citizens advice director of policy, adds: ‘It’s essential people can access insurance. But we know people are having to make difficult choices as they try to pay bills.’

DAMNING DATA

ReseaRch by compare the Market found the average motorist buying an annual car insurance policy between april and June this year paid £ 704, up from £653 in the same three months of 2021. Younger drivers aged 17 to 24 paid £ 1,247, up from £ 1,112 last year.

Julie Daniels, motor insurance expert at comparethemarket.com, says: ‘This rise in premiums is a result of increased cost pressures for insurers, including an uplift in the value of second-hand cars and higher repair costs.

‘as the cost of claims has increased, insurers are now passing on these costs to customers through higher premiums.’

The study also found cars with big engines attracted higher insurance bills — even if the vehicle is worth less.

The average cost of a year’s cover for a £2,232 Vauxhall corsa sXi, that has a powerful engine, was £882 in 2022 — up by 18 pc from £748 the year before. Motorists with a Fiat 500 Lounge, worth £5,119, paid £521 for insurance, up 12 pc from £464 in 2021.

LOYALTY COSTS

The spike in insurance prices comes despite changes which were supposed to mean cheaper premiums this year for loyal customers.

For years, millions of policyholders were penalised with relentless premium hikes at renewal. Now, they can have access to the same discounts as new customers.

Research firm Mintel found a policy’s price is the biggest consideration for nearly half of motorists when they are choosing between insurers. and experts say rising premiums have led some to consider selling their cars.

aviva’s customers have also faced huge rises in home insurance, even if they haven’t made a claim.

church pastor Martin Pearson had been with the firm for nine years when it tried to hike the premium for his three-bed semi by 22 pc this month. The grandfather was quoted £207 — £37 more than what he paid last year.

Martin, from stroud, Gloucestershire, who found a quote with another firm for just £145, says: ‘I can’t see how a 22 pc increase, when there have been no changes or claims, can be justified.’

an aviva spokesman says Martin’s quote was ‘fully compliant with the new Fca rules’ and lower than the price he would have been offered as a new customer.

FUTURE FEARS

eXPeRTs fear the economic climate could turn people into criminals if tempted to make false claims or drive without insurance.

a poll by consumer Intelligence last month found one in five people would consider insurance fraud, up from one in ten in 2021.

Uninsured drivers risk a £300 fine and six penalty points on their licence. Those without home insurance could pay hundreds of thousands in repairs for any storm, fire or flood damage. Darren Black, general insurance head at Nationwide building society, says some are already cancelling their cover.

and there may be further hikes to come.

Direct Line blames inflation for pushing up the cost of insurance claims, as its shares fell to their lowest level in a decade. The firm warned that while it had increased premiums, they were still lagging behind the cost of payouts.

Jenny Ross, Which? money editor, warns: ‘The Fca should be keeping a close eye on how insurance providers are setting prices.’

an association of British Insurers spokesman says firms are committed to keeping prices ‘as competitive as possible’, adding: ‘ Like many other industries, insurers are facing increasing cost pressures, including some building materials, supply chain issues and more expensive vehicle parts and repairs.’