UK car insurance premiums have jumped by a whopping 20% during the last 12 months – with motorists now paying £657 on average, £107 more compared to the same period last year, according to the latest Confused.com Car Insurance Price Index.
The index, released in association with WTW, is based on price data compiled from over six million customer quotes per quarter. It revealed that a comprehensive car insurance policy’s average cost is now the most expensive it has been since 2011.
Moreover, car insurance premiums have increased for six straight quarters following a price rise of 4% (£28) in the first quarter of 2023.
The index explained that the UK’s inflation rate of over 10% for six consecutive months, which remains close to a 40-year high, has directly impacted insurers.
“Fast-paced inflation throughout the UK economy has driven up the costs insurers face in fulfilling claims, such as rocketing motor repair, parts, and labour prices, that have, in turn, seen premiums surge,” said Tim Rourke, UK head of P&C pricing, product, claims, and underwriting at WTW.
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The index showed that drivers of cars up to eight years old have taken a significant hit from premium rises, subject to annual increases of more than 20%, topped by 27% for drivers of three-year-old cars.
Higher priced cars have also been subject to much more severe increases over the last year, with annual increases exceeding 30% for cars worth over £30,000, peaking at a rate of 37% for cars worth over £40,000.
All UK regions recorded double-digit price rises in insurance premiums over the last 12 months, with London drivers having seen an annual rise of 23%, with average premiums now costing £1,067 in Inner London and £845 in Outer London.
The Southwest of England and the Scottish Borders saw the smallest annual increases, but drivers still saw a significant annual rise of 16%, with average premiums now costing £434 and £428, respectively.
