Car insurance premiums fell by 2% between July and September 2024, with the average driver now paying £612 a year for cover.

The latest drop in premiums follows another 2% drop between April and June 2024, according to trade body the Association of British Insurers.

But this will provide little relief to drivers, who are still paying more than 40% more for car insurance than two years ago – the typical premium was £436 in summer 2022.

The ABI said that despite the recent drop in prices, premiums remained high due to high claims costs and overall price inflation for insurers and repairers.

It all adds up: The high cost of car insurance adds to the pain of overall rising bills

In total, insurers paid £2.9 billion in motor insurance claims in the third quarter of 2024, an increase of 14% on the £2.5 billion paid in the same period of the year. ‘last year.

Although the average amount of claims paid remained stable from the second to third quarters of 2024, at a value of £4,800, it was 8% higher than in the third quarter of 2023.

Repair costs totaled £2 billion for the quarter, 26% higher than in Q3 2023.

The average claim for theft from a vehicle fell by 7% in the third quarter of 2024 compared to the third quarter of 2023, to £12,200, but theft from a vehicle increased by 17% to £3,000.

The ABI said car insurers paid £1.13 in claims in 2023 for every £1 collected in premiums, according to consultants EY.

But critics say the premium hikes run counter to the fact that the biggest cost paid by auto insurance premiums — bodily injury claims — is falling.

The £1.13 figure above does not include the money insurers make from their investments, which can be substantial.

Mervyn Skeet, ABI General Insurance Policy Director, said: “Although our latest figures show a second consecutive quarterly decline in average car insurance premiums, we know that the sector continues to face significant cost pressures and that the price of cover remains a pressure on household finances.

“We remain committed to doing all we can to support motorists.”

Last month, the government demanded answers over the rising cost of car insurance.

A Labor Party study asks insurers about who will be hit hardest by rising costs, including ethnic minorities, people on low incomes and older and younger drivers.

A working group examining the issue includes industry groups and consumer champions such as the Association of British Insurers (ABI), Citizens Advice, Which? and Compare the market, as well as insurance regulators.