Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she will bring forward plans to make car insurance more affordable in general and particularly for those living in areas of deprivation.

Insurers make commercial decisions about pricing and the terms of cover they offer based on their assessment on the likelihood of a claim being made and the cost of those claims. The government does not generally intervene in these pricing decisions by insurance companies.

However, the government is determined that insurers should treat customers fairly and firms are required to do under Financial Conduct Authority (FCA) rules. The FCA requires firms to ensure their products offer fair value, meaning the price paid by consumers should be reasonable compared to the overall benefits received.

The Government launched a cross-government Motor Insurance Taskforce in October 2024 to address the rising costs of motor insurance, identifying short and long-term actions aimed at stabilising or reducing premiums, while maintaining appropriate levels of cover. The government plans to publish the final report of the Taskforce shortly. As part of the taskforce’s work to understand how the cost of motor insurance impacts on particular groups of customers, the FCA is conducting statistical analysis to evaluate the impacts on different age groups and consumers living in areas with a higher proportion of minority ethnic residents. The FCA will publish its findings later this year.