UK car insurance rates rise by 6%, here are the details

UK car insurance rates rise 6% as the industry deals with "a range of difficulties," according to WTW

The average UK driver now pays £554 for comprehensive car insurance, according to research from WTW and Confused.com Car Insurance Price Index. Premiums have increased by 6% (or £32) in the last year.

According to recent information from broker WTW, the average cost of a UK vehicle claim will increase to £5349 in 2021 from £5037 the previous year.

Prices for auto insurance have gone up year over year for the past two quarters since the new FCA pricing regulations took effect on January 1st, 2022.

From April to June 2022, Outer London drivers had a 3 percent (£17) increase in the cost of comprehensive auto insurance, with median premiums now costing £704.

UK car insurance rates rise by 6%, here are the details

UK car insurance rates rise by 6%

Drivers in the South of England, meanwhile, experienced the highest quarterly decrease, with their insurance prices falling by 1% to £437.

Being the most expensive area in the UK, Inner London's cost of living has increased by 2% (£18) during the last three months.

Manchester and Merseyside ($701) are just slightly less expensive than Outer London ($704) in terms of typical premium expenses.

The two regions in the United Kingdom with the lowest average annual vehicle insurance rates are the South West of England (£373) and the Scottish Borders (£366).

Additionally, rates for drivers in Enfield, Motherwell, and Lancaster experienced the biggest quarterly rises of 4%, raising their average premiums to £730, £490, and £425 respectively.

West Central London is still the most expensive postcode in the UK (1,046, £1,046). On the other hand, drivers in Llandrindod Wells, Wales, continue to pay the least for comprehensive auto insurance in the UK, with an average premium of £339 in the second quarter of 2022.

UK car insurance rates rise by 6%

According to additional data, female drivers between the ages of 17 and 20 experienced the largest quarterly increase of just over 3% (£32), bringing their premiums to £1,076, while male drivers 71 and older are now paying on average £404 following a 3% change in prices (£11) in the second quarter of 2022.

However, male drivers between the ages of 17 and 20 continue to pay the highest average rates of any group, at £1,519.

A combination of increasing accident frequency following the pandemic lull and soaring inflation sees increased pressure on insurance premiums coming from claims expenses and repairs, according to Tim Rourke, UK Head of P&C Pricing, Product, Claims and Underwriting at WTW. These difficulties are made more difficult by the fact that insurers must also adapt to the FCA's pricing rules, which became effective in January and forbid renewal prices from being higher for current clients than for new business.

Despite cost pressures, he writes, "motor insurance premiums have not yet skyrocketed and are still relatively cheap by historical standards. Looking ahead, the situation is more complicated as the industry must overcome numerous obstacles in the second part of 2022 and into 2023. Insurance companies are preparing for increased costs such as more expensive repairs required by increasingly complex vehicles and extended repair periods because premium rates are well below the level needed to keep up with inflation, which is soaring at its fastest rate in 40 years.

UK car insurance rates rise by 6%

"While they may not be the most costly pricing on record, we are now seeing some of the highest vehicle insurance premiums in close to two years," said Louise O'Shea, CEO of Confused.com. After a period of incredibly low pricing during COVID-19, this was to be expected. We do, however, have another tumultuous period ahead of us given the current economic scenario that both consumers and businesses are dealing with.

"As consumers hunt for savings wherever they can, there is an opportunity for insurers to be as competitive as possible with their pricing. And it's crucial that as a sector, we assist our clients in locating these discounts.

Many different motor insurers are being impacted by the current inflation event. Sabre Insurance Group recently reported that it had a significant influence on its performance for the first half of the year.