Comprehensive car insurance premiums have increased sharply by 14% (£72) since the third quarter of 2021, with UK motorists now paying £586 on average, according to the latest Confused.com car insurance price index in association with WTW.

Car insurance premiums have seen consecutive annual increases for the last three quarters, following the implementation of the new FCA pricing rules on 1 January 2022. Motor insurance premiums have now also risen for four quarters in a row, with a significant rise of 6% (£32) recorded in just the last three months, according to the index, which is based on price data compiled from over 6m customer quotes per quarter.

Tim Rourke, UK head of P&C pricing, product, claims and underwriting at WTW, said: “Car insurance prices have risen across the board as insurers have found it increasingly challenging through 2022 to absorb a bitter cocktail of rising cost pressures. Soaring inflation, rising accident frequency due to a post-pandemic increase in road traffic, higher used car prices, and a supply chain crisis resulting in more costly repairs have caused the biggest annual jump in premiums for five years.”

From July to September 2022, all regions recorded double-digit price rises in insurance premiums. Northern Ireland saw the largest percentage increase in the cost of comprehensive car insurance, where drivers saw an annual rise of 20% (£106), with average premiums now costing £631. Drivers in the Scottish Borders experienced the biggest percentage rise in Scotland with an annual hike in premiums of 19% (£64). Despite this rise, the region remains the cheapest region for car insurance, where prices now average £391.

Inner London saw the greatest annual rise in England, where insurance premiums increased by 16% (£132), and remains the most expensive region with prices now on average at £936. Manchester and Merseyside (£737) continues to be the most expensive area outside of the capital, and only £4 less than average premium prices in Outer London (£741).

Male drivers aged between 21 and 25 saw the greatest percentage increase of 18% (£190) during the last 12 months, taking their premiums to £1249. Following a 17% annual shift in prices (£248), male drivers aged between 17 and 20 now pay on average £1673, which is the most of any demographic and £424 higher than the next highest age group. Female drivers aged between 66 and 70 continue to benefit from the lowest annual premium at £287.

Rourke added: “Rising premiums add to the cost-of-living squeeze facing customers, forcing them to seek savings on insurance. While choosing a higher excess and less add-on products can help reduce premiums, this may also increase the risk of drivers being left without an adequate safety net when they need it most. This places further pressure on insurers to keep motor premiums as competitively priced as possible, while continuing to deploy robust defences to policy and claims fraud, which typically rise during difficult financial times.”

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