Car insurance rises for the first time in 18 months as drivers return to the road

Drivers already hit by the soaring cost of fuel are facing a double whammy of expenses as car insurance rises for the first time in 18 months.

A survey of 2,000 motorists conducted by and insurance company Willis Towers Watson found that insuring a vehicle is now £12 more expensive than it was a year ago.

Two in five (42%) of those who received their renewal in the past quarter saw their price increase year-on-year, rising by £39 on average.

It’s a similar picture for home insurance customers, with just over 2 in 5 (41%) of those who received their renewal in the past quarter encountered a  price increase. Policies rose by £3 on average.

“Car insurance costs are starting to increase, and this is mostly down to the fact that we’re driving a lot more now than we were 12 months ago, and this means the number of claims insurers are paying out on is likely to have increased too,” said Confused’s chief executive Louise O’Shea.

The most expensive regions to get car insurance were inner London (£864), Manchester (£697), Outer London (£687), West Midlands (£657) and Leeds (£627). The Scottish Borders is the cheapest region for car insurance, with an average cost of £370.

Changes to car insurance were introduced by the Financial Conduct Authority (FCA) in January that have stopped insurers pricing new and renewing customers differently.

Under the new regulations, insurers must offer drivers the same price they would receive as a new customer buying in the same way, banning what was previously known as a new customer discount.

Following these changes, one in five (19%) drivers who received their renewal in the past three months wrongly believed that their renewal wouldn’t increase. A further 1 in 5 (21%) are expecting their renewal price to be cheaper, according to the survey.

Related Posts

Discounts for how you buy insurance

The chosen premium payment method can also sometimes earn drivers a cost reduction. Pay-in-full discount Most insurers allow policyholders to pay monthly or quarterly. However, drivers who…

Discounts on Car Insurance: How You Can Save Money

Saving money on auto insurance is a top priority for most drivers. The good news is, there are plenty of discounts for car insurance out there. This…

5 Factors That Affect the Cost of Your Auto Insurance

1/ Driving record The policyholder’s driving record is the single most important factor that affects auto insurance premiums. That’s because car insurers price policies based on the…

Is it worth it to buy an electric car?

Ultimately, the best car for an individual person will depend on their needs, budget, and circumstances. However, there are enormous cost benefits to owning an electric vehicle,…

How to get cheaper car insurance for electric vehicles

Despite the bigger bill, there are ways you could lower car insurance costs for your electric vehicle. Opt for a higher excess. Since EVs tend to break…

Why insurance for electric cars (like Tesla) is so expensive

With petrol prices out of control and Elon Musk’s Tesla making moves in Australia, Australians have once-again driven up their demand for electric vehicles (EVs). While this…