British insurers' group says rising cost of repair is to blame.

The average cost of British car insurance claims hit record levels in 2017, despite a slight fall in the number of personal injury claims made.

Data from the Association of British Insurers (ABI) shows that the amount paid on all motor insurance claims during 2017 ran to around £8.1 billion – much the same as in 2016 – but the average claim price of £2,936 was the highest on record.

The increase came in spite of a minor fall in the number of personal injury claims, with the number settled in 2017 totalling 320,000.

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According to the ABI, the increase in claim costs and, consequently, premium rises is down to increases in the cost of theft claims and the price of repairs.

This follows news that emerged last month that insurance premiums jumped nine percent in 2017, bringing the cost of the average policy to £481.

The ABI’s assistant director in charge of motor and liability, Rob Cummings, said that government intervention was needed to prevent costs continuing to spiral.

‘Despite motor insurance remaining a highly competitive market, cost pressures saw the average price paid for motor insurance jump by nine percent to a record high in 2017,’ he said. ‘Putting a lid on excessive costs, which end up being paid for by motorists, remains a priority for insurers. This makes it all the more important for the government to play its part by pushing ahead with its reforms to personal injury compensation without further delay.’

The ABI has previously called on government to freeze insurance premium tax at its current rate of 12 percent, and to adjust the so-called 'discount rate', which is used to calculate the payouts for whiplash and other personal injury claims.