UK car insurance premiums see biggest annual rise in over a decade

The average cost of a comprehensive car insurance policy is now the most expensive it has been since 2011.

This is the sixth consecutive price rise, following an increase of 4% in the first quarter of 2023.

The data also showed that drivers aged 17-20 experienced the sharpest annual rise, with prices increasing more than £300.

Fast-paced inflation throughout the UK economy has driven up the costs insurers face in fulfilling claims.

Tim Rourke, WTW

The rate of inflation in the UK has been more than 10% for six straight months and remains close to a 40-year high, WTW and Confused added.

Tim Rourke, UK head of P&C pricing, product, claims and underwriting at WTW, said: “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.”

Regional review

All regions across the UK recorded double-digit price rises in insurance premiums in the past 12 months.

Drivers in London saw the largest percentage increases in the cost of comprehensive car insurance, with an annual rise of 23%, and average premiums now costing £1,067 in inner London and £845 in outer London.

The smallest annual increases were seen in the south west of England, and Scottish borders, where drivers still saw a significant annual rise of 16%, with average premiums now costing £434 and £428 respectively.

Older cars

According to the research, price rises have been particularly severe for drivers of cars up to eight years old, which have been subject to annual increases of more than 20%, topped by 27% for drivers of three-year-old cars.

Similarly, higher-priced cars have been subject to some notable increases over the last year, with annual rises exceeding 30% for cars worth more than £30,000, peaking at a rate of 37% for cars worth more than £40,000.

Drivers aged 17-20 took the largest hit of any group, with male drivers in that age bracket experiencing a percentage increase of 29% and female drivers seeing their premiums surge by 30% during the past 12 months.

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