Insurance Sector Will Reach Tipping Point on Vehicle Repairs Soon

One of the fundamental problems in the UK economy is that low paid work isn’t worth doing, especially if you have children or other dependants. That means you have to pay a good wage, say 30K plus, to encourage someone working class to stay in work, get trained, adhere to DEI policies, pay tax & NI etc. For some skilled trades, the ceiling is 45K now, as there is plenty of freelance vehicle repair or vehicle transport work around at high day rates, plus travel expenses.

All this bumps up insurance premiums in the end, since insurers have to pay everyone in the chain; FNOL, breakdown services, storage, repair, battery pack removal, auto electrical specialists etc more money, to do the same tasks as pre-Covid times.

IE has long said that the industry itself needs to fund UK-wide vehicle repair training Academies, especially for hybrid and battery cars, or specialised vehicles like motorcycles, motorhomes or classics. You can’t expect colleges or the public sector to do this, since 80% of the public sector is ideologically opposed to cars, vans and motorcycles for Net Zero reasons. So the training on petrol and diesel vehicle repairs will probably be box ticking level, poor quality and outdated.

The long term solution is to invest in an infrastructure which effectively recovers, triages and repairs vehicles in a more joined-up way. Petrol and diesel engine vehicles will be around for decades yet and insurers need to focus on how they repair cars quickly, and as a percentage of their book value. Some vandalism claims like windscreens and minor dents are repairable, other times a full respray plus a broken mirror will write off a prestige car that is say 10 years old. It isn’t good enough to simply write off all cars with minor damage and so fuel the already high credit hire and vehicle replacement merry-go-round.

PEOPLE ARE DOING THE MATHS ON CAR INSURANCE

In a few years a tipping point will be reached where perhaps 3-4 million drivers will opt out of insurance completely. Why? Simple maths.

As premiums hit 3K on average, even for no convictions, no claims drivers, many working class people will wonder if it is worth insuring their car, which they use perhaps 2-3 times a week. £3000 premiums are often more than the value of the car, so where is the financial loss if they are caught and the car seized by the Police? Then there is the wider societal problem of certain communities “defending” their vehicles against seizure by the Police or authorised DVLA squads. Think about those scenarios before assuming the industry can keep on jacking up premiums indefinitely.

The answer is affordable car insurance on low value cars and vans, on PAYG schemes, with low interest rates to meet future FCA compliance. The industry needs to deliver, and fast.

Here’s some data from Quotezone on the topic;

The average cost of repairing vehicles from vandalism damage in Great Britain has surged by 37% over the past year – and is as much as £10,000 in some regions. Comparing insurance claim figures from Q2 in 2023 and 2024, this new data from insurance specialists at Quotezone reflects a growing concern for motorists, as 40% of Brits know someone who has had their car vandalised.

Repair costs are particularly high in South East England, where motorists have experienced a huge 400% rise in the past year. The average repair cost in the region was £2,032 in 2023, whereas now it’s a staggering £10,169. Scotland has also seen a significant rise in vandalism repair costs, from £2,021 to £3,215 (+59%). Only two regions have actually witnessed a decrease in costs. In the North East the average repair cost in 2023 was £4,781, whilst in the same period in 2024 it was £2,225 (-53%). Yorkshire also saw a 21% decrease, from £2,506 to £1,987.

The definition of vandalism varies depending on the insurer, but generally speaking, vandalism – also known as ‘malicious damage’ – simply means deliberate damage to your car.

This can include slashed or purposefully punctured tyres, scratched panels or paintwork by a key or other sharp object, smashed windows (even if nothing was stolen), graffiti, wing mirrors pulled off or broken, smashed lights, and deliberately dented body or panels.

Whilst the cost for repairing these damages varies drastically from region to region, on average they now cost 37% more than they did last year.

Quotezone CEO Greg Wilson says part of the increase in some areas could come down to the fact that more people are starting to own electric vehicles, as they typically cost more to fix.

Commenting on the data, Greg said: “The significant increase in vandalism repair costs across GB is a stark indicator of the growing challenges motorists face today.

“Part of this increase could be attributed to the rising number of electric vehicles on the road, which are often more expensive to repair. The overall rise in inflation has also driven up the cost of materials such as paint, glass, and replacement parts.

“Modern vehicles, especially luxury cars, also come with more advanced technology and materials that can be costly to fix. Damage to sensors and cameras, for example, can significantly increase repair costs.

“This recent surge in repair costs is part of the reason car insurance premiums have been soaring – pushing up prices right across the board.

“Beyond the financial hit, these incidents are worrying for community safety. Persistent vandalism can affect local neighbourhoods, increasing crime rates, and even driving down property value.”

Quotezone helps millions of UK drivers every year compare motoring insurance quotes and find real savings on all sorts of products, everything from car insurance for learner drivers, to the likes of taxi driver and even truck insurance.