Understanding motor claims inflation

Motor claims inflation has been on the rise in recent years, impacting car insurance premiums and overall insurance costs. This trend in price rises is driven by various factors within the insurance industry, including the following:

Vehicle technology

The increase in advanced vehicle technology has led to more complex and expensive repairs. For example, the rise in electric vehicles. As a result, motor insurance claims costs have risen.

Rising prices: Energy 

The rising price for energy has had a cascading effect on material costs and part availability. This has led to higher repair costs and longer repair times. These factors have contributed to the inflationary pressures on motor claims.

Skilled labour shortage

The vehicle repair industry is facing challenges in finding skilled labour, which has driven up wage costs. This shortage of skilled labour increases repair costs, but it also leads to delays in repairs when the required level of skilled labour is unavailable.

Hire periods

The current repair delays due to a slow down in parts being available and increased costs caused by inflationary pressures have resulted in extended vehicle hire periods. On average, hire costs relating to vehicle rental have increased by 30%. This is due to these prolonged periods, further contributing to motor claims inflation.

If you have any further questions or need assistance, please contact your Marsh adviser.