UK motorists pay average of £815 for comprehensive car insurance

Comprehensive car insurance for UK motorists increased by 4% in quarter four of 2019, with average premiums rising by £32 since 2019’s Q3 to now reach a total £815 – this is £41 or 5% more than motorists paid this time last year.

These statistics are from the latest Confused.com Car Insurance Price Index, compiled in association with Willis Towers Watson. The index is based on anonymous price data from enquiries submitted on Confused.com from nearly six million customers per quarter.

Graham Wright, UK lead of P&C personal lines pricing at Willis Towers Watson, explained: “This is the fifth quarter in a row where prices have swung between increases and decreases, showing the market’s ongoing uncertainty around pricing.

“This uncertainty has been fuelled by many elements, including timing challenges with the Civil Liability Bill implementation. That said, the increases have tended to outweigh the decreases and the recent challenging environment for 1/1 reinsurance renewals on motor excess-of-loss will have done nothing to help insurers keep costs under control.”

At the end of 2019, comprehensive car insurance premiums nearly reached the peak price recorded in 2011 of £858.

Regional differences

Although the cost of comprehensive car insurance increased across all UK regions over the last year, drivers situated in inner London saw the biggest annual rise of 8% - equating to £91. This led to premiums escalating from £1,169 to £1,260.

At the other end of the scale, the smallest annual increase of just 1% was seen in the Scottish Borders – premiums here now total £615 on average. The south west is the cheapest region overall for comprehensive car insurance, however, costing an average £595.

Zoning in on London even further, west central London saw car insurance costs skyrocket by 14% annually, leading to premiums of £1,371, while London east has been declared the most expensive postcode area for UK motor insurance, as premiums here now cost £1,443 on average.

Outside of the capital, Dorchester is the cheapest town for car insurance, where drivers paid £550 at the end of 2019 on average. Comparatively, the West Midlands and Manchester/Merseyside are the only regions outside of London where car insurance prices exceed £1,000 – in Q4 of 2019, these reached £1,011 and £1,053 respectively.

Demographics

Female drivers aged between 26 and 30 saw the greatest annual increase in their car insurance premiums (9%) – premiums moved from £755 on average to £823. Despite this, male drivers aged between 17 and 20 are still paying the most for their comprehensive car insurance; as at Q4 of 2019, this demographic was paying £2,369 for this cover, compared to £2,230 a year ago. Premiums for these drivers increased by 6% between Q3 and Q4 of 2019.

Steve Fletcher, head of data services at Confused.com, said: “We are seeing the biggest annual increase in car insurance premiums in two years and [the] steepest quarterly [rises] since June 2017. And the scale of these increases shouldn’t be understated.

“The past 18 months have been very volatile, with prices fluctuating before delivering a powerful blow to end the year. And this is a pattern we have seen before, which resulted in premiums increasing a further £100, on average.

“If we see a repeat of this cycle, then we can anticipate prices to exceed £900 in the next 18 months and reach the highest on record. With the current economic uncertainty surrounding the UK, we shouldn’t hope to see an easing of insurance premiums in 2020.

Wright added: “Many of the challenges observed throughout 2019 will persist in 2020, as cost pressures remain from expensive vehicle repairs, theft claims, last summer’s discount rate change, Brexit-related uncertainty and IPT increases.”