Comprehensive car insurance premiums have increased by a record 40% (£222) in the last 12 months, with UK motorists now estimated to be paying £776 on average.
According to the latest Confused.com Car Insurance Price Index in association with global broking firm WTW, car insurance premiums are at their highest level on record since the two companies launched their car insurance price index. in 2006. The data shows that the last peak occurred. It was 12 years ago in the second quarter of 2011 when the average premium was £663.
At 40%, the annual increase in motor insurance costs continues to outpace CPI inflation, which was held at 8.7% in May.
In addition, car insurance premiums have also increased for seven consecutive quarters following a price increase of 18% (£119) in the second quarter of 2023. Based on price data compiled from over six million customer quotes per quarter, this is the largest quarterly increase on record and by a significant margin.
The previous fastest quarterly increase was set in the second quarter of 2010, 13 years ago, when prices rose by 12%.
“Motorists face the sharpest acceleration in premium prices, as insurers continue to face a cocktail of rising costs. High levels of claims inflation are driven primarily by the sharp rise in used car prices, fueled by increased vehicle theft, spare parts delays, longer repair times and higher wages, all of which push costs above premiums revenue and forcing insurers to play by increasing. prices,” said Tim Rourke, UK Head of P&C Pricing, Product, Claims and Underwriting at WTW.
Elsewhere, the data shows that all regions across the UK have recorded double-digit price increases in insurance premiums over the past 12 months. This ranged from 35% for drivers in Central and North Wales taking their annual premium up to £523, to the biggest annual percentage increase of 45% recorded in Central Scotland where average premiums now worth £691.
It’s worth noting that the South West of England continues to be the cheapest region for car insurance, with average premiums now costing £509, while, at the same time, Inner London remains the most expensive region , where prices are now on average £ 1257 which has increased in the last 12 months by 43% (£375).
Another key figure is that the average cost of car insurance in Outer London has for the first time exceeded £1000, with drivers now paying an average bill of £1003.
Meanwhile. Manchester/Merseyside (£965) and the West Midlands (£940) remain the most expensive areas outside London, after recording increases of 38% and 43% respectively in the last 12 months.
More locally focused data from the index also shows that motorists in Kilmarnock experienced the sharpest annual increase of 47% taking their average premiums to £613. Kirkwall, the capital of the Orkney Islands, is the least expensive city in the UK with prices on average currently costing £461.
Another noteworthy figure is that drivers aged 17-20 took the most hits of any age group, with male drivers in this age bracket experiencing an annual percentage increase of 60% (£903) bringing their premiums to £2414, with prices not seen at this level since 2012.
Female drivers from the same age group saw their premiums rise by 61% (£652) in the last 12 months to a record £1728.
Steve Dukes, CEO of Confused.com, said: “Consumers are facing rising costs across the board, and car insurance is no exception. financial impact on many people. We know there are many reasons for this, with inflation driving up the cost of claims for insurers.
“But as an industry we need to help drivers understand where they can save money when it comes to changing their policies. We know more drivers are buying and switching, so now is the time for insurers to be as competitive as possible. Doing so means having a higher chance of winning new business, but also helps drivers by not adding to the burdensome pressures of finances faced by many.
