The introduction of 20mph speed limits in several areas of the UK has been linked to a reduction in car insurance costs, The Guardian reported, citing recent data.
Last week, a price comparison website reported a significant annual drop in UK car insurance prices, marking the largest decrease in over a decade. Confused.com revealed that the average cost of comprehensive car insurance fell by £161, or 16%, in 2024, bringing the average premium to £834. That is down from £995 the previous year and represents the lowest price recorded in 18 months.
Steve Dukes, chief executive of Confused.com, attributed part of the decline to renewed competition among insurers and improved vehicle safety features. However, he also highlighted the impact of 20mph speed control zones introduced in various regions.
“Some UK insurers are observing that areas where 20mph zones have been introduced result in lower levels of claim frequency – a key factor in the cost of car insurance,” Dukes said. “Though many drivers find these reduced speed zones frustrating, it’s positive to see the bright spot this is creating for drivers’ costs.”
The rollout of 20mph limits has been met with mixed reactions. Wales implemented a default 20mph speed limit in built-up areas in September 2023, though the government later adjusted the policy in response to public opposition. In England, cities such as London and Manchester have been expanding 20mph zones, with Transport for London reporting that 165 miles of its roads now fall under this limit.
Evidence suggests these measures are reducing claim costs. In June 2024, insurer esure reported that vehicle damage claims in Wales fell by 20% following the introduction of the default 20mph limit. The company estimated that a nationwide rollout of such zones could save drivers approximately £50 annually on motor insurance.
Despite the overall decline in average premiums, Confused.com found that more than half of motorists who received renewal quotes in late 2024 saw an average increase of £78. The company noted that those shopping around for new policies were most likely to benefit from the price reductions, with younger drivers seeing the largest savings.
Other industry research also points to reductions in car insurance premiums. Pricing consultancy Pearson Ham recently stated: “We anticipate further declines in 2025, with competitive pressures likely to drive additional reductions over the coming year.”
While the impact of 20mph zones continues to be debated, the potential for cost savings on car insurance adds a financial dimension to discussions surrounding their implementation.
