London drivers hit hardest as UK car insurance costs rocket to record high
UK car insurance costs increased the highest amount on record last year, according to a closely watched index.
The average quoted price to insure a car jumped by 67.2 per cent in the year to November, beating a previous record of 61 per cent over the twelve months to August.
London remained the most costly place for a premium with a huge jump of 76.9 per cent, followed by the West Midlands and Scotland, which both increased 69.4 per cent.
Nearly a quarter of drivers received a quote of £500 and £749 to cover their car in November. Payouts for claims reached a record £2.54bn in the third quarter of the year, partly influenced by Storm Babet.
“Record payouts for claims are having an impact on quoted premiums and there is evidence that in
certain areas such as Scotland and the East Midlands recent storms have had an impact on
premiums,” Max Thompson, insurance insight manager at Consumer Intelligence, said.
“During the last quarter small increases in telematics competitiveness were observed across all the
age groups of one to two per cent. However, motorists across all age groups and all over the country
are seeing major increases in quoted premiums,” he added.
However, the index showed signs of a slowdown in prices. While quoted premiums rose 10.6 per cent in the three months up to November, this was significantly lower than the 22 per cent rise in the three months to August and the 15.2 per cent increase in the three months to May.
Signs the rate of increase is slowing will come as a relief to providers, with car insurance sector struggling in recent years with significant claims inflation. Since Consumer Intelligence first started collecting data in 2013, overall quoted premiums have more than doubled by 124.4 per cent.
In a report last June, consultancy EY said that the insurance market had experienced its worst performing year in a decade in 2022.