Car insurance premiums drop for third consecutive quarter

Car insurance premiums have dropped for three consecutive quarters after a two-year rise, according to the latest Confused.com and WTW Car Insurance Price Index.

The data, which was published today (14 October 2024), showed that the average premium fell by 2% (£21) between July and September 2024, with UK motorists now paying £861 on average.

It comes following price falls of 5% (£54) in the first three months of 2024 and 6% (£59) in the second quarter.

Car insurance premiums also recorded their first annual decrease since 2021 of 7% (£63).

Tim Rourke, UK head of P&C pricing, product, claims and underwriting at WTW, said: “Insurers have felt able to continue the reducing trend in premiums supported, in particular, by benign claims frequency experience for most of 2024.

“This reflects a basket of influences, including action on reducing speed limits, the increasing maturity of workers’ hybrid working arrangements and consumers increasingly choosing slightly higher policy excesses to reduce their insurance costs.

“The rate of premium reduction seen earlier in 2024 has abated somewhat reflecting continuing high inflation rates on some types of claim, including total loss settlements, mixed personal injury claims and injury general damages and claims arising from recent episodes of extreme weather.”

Regions

Over the last three months, most regions across the UK saw decreases in car insurance prices, with reductions ranging from 1% to 4%.

Drivers in outer London experienced the largest drop, with premiums falling by 4% to an average of £1,104.

In contrast, west central London remains the postcode area with the highest prices in the country, where drivers now pay an average of £1,738.

Meanwhile, south west England continues to be the cheapest region for car insurance, with average premiums sitting at £571.

Outside of London, the West Midlands remains the most expensive area, with prices decreasing by 1% (£14) to £1,068.

Steve Dukes, chief executive at Confused.com, said: “Given the cost of living pressure, the number of customers shopping around and switching their car insurance each year remains at historically high levels.

”And it’s important that as an industry we’re highlighting the importance of shopping around to help customers save money, even with prices coming down. The insurance market today is a lot broader, with insurers expanding their product ranges and new brands coming to market, creating more choice for customers looking to find a policy that’s suitable for them at a better price.”