TL;DR
UK car insurance premiums have risen sharply in recent years. The Association of British Insurers tracks the average premium quarterly. Higher repair costs, theft levels and personal injury claims are among the drivers. Comparison sites remain the standard way to find competitive quotes.
UK car insurance premiums have risen sharply in recent years. The Association of British Insurers tracks the average premium quarterly through its Motor Insurance Premium Tracker. Higher repair costs, vehicle theft levels and personal injury claims are among the drivers, and comparison sites remain the standard way to find competitive quotes.
What ABI data shows
The ABI publishes the Motor Insurance Premium Tracker each quarter. The tracker is based on policies sold by ABI member insurers and gives the average premium paid by motorists during the period.
The figure represents the actual premium paid rather than the quoted premium, so it reflects renewals as well as new business. Recent years have seen quarter-on-quarter rises driven by claims inflation.
Why premiums have risen
Repair costs have risen because of higher parts prices, particularly for cars with advanced driver assistance systems where windscreens and sensors are expensive to replace and recalibrate. Labour costs have also risen.
Theft levels rose during the pandemic and have remained elevated. Personal injury claims, especially whiplash claims, were affected by the Civil Liability Act 2018 reforms but underlying claims inflation continues.
How to compare cover
Major comparison sites including GoCompare, Compare the Market and MoneySupermarket aggregate quotes from most UK insurers. The sites do not cover Direct Line, which sells direct, so a direct quote from Direct Line should be compared alongside.
Comparison sites earn a commission on policies sold through them, but the FCA requires that the quoted price is the same as the direct quote from the insurer for the same risk. Aggregator sites do not have a separate price.
Adjusting cover to save
Increasing the voluntary excess from £100 to £250 or higher can reduce the premium, although it raises the cost of a small claim. Drivers should weigh the excess saving against the risk of a claim during the year.
Black box insurance and pay-by-mile policies can suit young drivers and low-mileage motorists. Cuvva, By Miles and Just Insurance among others offer pay-by-mile cover, with a base fee and a per-mile charge.
FCA new business and renewal rules
Since January 2022 the FCA has required insurers to offer renewal prices no higher than the equivalent new business price. The rule, designed to end the loyalty penalty, has reduced the gap between new and renewal pricing.
Drivers should still shop around at renewal. Comparison sites can show alternative quotes that may be lower than the renewal price, and switching insurer typically takes 10 to 15 minutes online.
Key facts
- ABI publishes the Motor Insurance Premium Tracker quarterly.
- Repair costs and theft are key cost drivers.
- Major comparison sites cover most insurers, except Direct Line.
- FCA loyalty penalty rules cap renewal prices since 2022.
- Black box and pay-by-mile policies suit specific drivers.
FAQ
Why has my car insurance gone up?
Repair costs, theft levels and personal injury claims have all risen. The ABI publishes the Motor Insurance Premium Tracker each quarter, which shows the average market premium paid by motorists.
How can I find a cheaper quote?
Use major comparison sites such as GoCompare, Compare the Market and MoneySupermarket, plus a direct quote from Direct Line, which sells direct. Compare the total cost including excess and add-ons.
Does increasing my excess reduce the premium?
Often, yes. Raising the voluntary excess from £100 to £250 or higher can cut the premium, but raises the cost of a small claim. Weigh the excess saving against the risk of a claim.
Are renewal prices still higher than new business?
The FCA has required insurers to offer renewal prices no higher than equivalent new business prices since January 2022. The gap has narrowed, but shopping around at renewal often still finds a lower quote.
