Car insurance statistics: 2023

Latest estimates put the value of the UK car insurance industry at around £19.27 billion, a figure that's been increasing at a steady rate over the years.

Here we'll dive into the latest figures surrounding the industry and look at the current state of the market.

Key statistics overview

• The average cost of car insurance in the UK is £995.
• Drivers aged 21 paid an average of £2,222, compared to £577 for 65-year-olds.
• Inner London is the most expensive place for car insurance, while South Wales is the cheapest.
• Admiral Group is the largest car insurance provider in the UK, with a market share of 14%.
• There are 195 motor insurance companies in the UK.
• The UK car insurance industry pays £11.84 billion in claims annually.
• The UK's car insurance market is the second-largest in Europe, behind Germany.
• Black box car insurance is popular with younger drivers, with 63% of users aged 25 and under.
• Car insurance fraud costs insurers in the UK an estimated £602 million a year, with 55,000 fraudulent claims reported in 2020.
• There were 4,389 complaints regarding car insurance between October and December 2022.

How much does a car insurance policy cost?

The average cost of car insurance in the UK is £995. 

That's according to the latest Confused.com car insurance price index (Q4 2023), based on more than 6 million quotes over the quarter and analysed in partnership with WTW.

Prices for different types of cover vary. Third-party only cover costs drivers £737, on average, in 2022. Third-party fire and theft (TPF&T) cost £592, on average.

These prices are just an average, and the actual cost of car insurance varies depending on many individual factors.

What are the different levels of car insurance cover?

Third-party-only (TPO) is the most basic form of car insurance. It provides coverage for damage caused to someone else’s vehicle, property, or people in an accident that you are responsible for. It doesn’t cover damage to your own vehicle. These policies tend to be more expensive because younger, or higher-risk drivers often choose this type of coverage.

Similarly, Third-party fire & theft (TPF&T) provides the same coverage as TPO but with added protection against theft, attempted theft, or fire damage to your own vehicle.

The increased cost of TPF&T policies can also be attributed to the fact that they’re commonly chosen by drivers who pose a higher risk.

Comprehensive car insurance, or ‘fully comprehensive’, is the top level of insurance you can get for your car. This type of insurance provides cover for you and your car if you’re involved in an accident, whoever’s at fault. It also covers repairs, damage to property and personal injury claims.

For example, young drivers pay more for car insurance, as they’re considered to be a higher risk.

Those aged 20 paid an average of £2,528 a year for comprehensive car insurance, according to the Confused.com price index (Q4 2023). But this drops the older they get.

For example:

• The average cost for 25-year-olds is less, at £1,677
• At 35 this drops to £1,183
• At 55 it stands at £717

But the average cost does start to rise again after this point. This could be due to older drivers being more likely to have medical issues or other age-related conditions that impact their ability to drive safely.

Where you live can also affect your car insurance price. Those in Inner London are hit the hardest, paying £1,607 a year, on average. In Outer London, this is slightly cheaper, at £1,291, on average.

This is because things such as population density, accident rates and types of drivers can affect your car insurance costs.

Less densely populated areas, such as some areas of Wales, the South West and the more remote areas in Scotland, all have cheaper car insurance.

The 5 most expensive UK regions

The 5 cheapest UK regions

How has the cost of car insurance changed?

The cost of car insurance has increased considerably over the years. At the end of 2006, when the Confused.com price index started, the average driver was paying £391 for their car insurance. However, by the end of 2020, this had risen by 47% to £575.

There was a noticeable increase in 2017, which is when the government introduced changes to the way that compensation is calculated for personal injury claims. This change, known as the Ogden rate, led to an increase in insurance costs for many drivers.

Who are the UK's biggest car insurance providers?

The biggest car insurance company in the UK is Admiral Group, which has a market share of 14%. The group includes car insurance brands such as:

• Admiral
• Bell
• Diamond
• elephant.co.uk

In total, these brands make £2.24 billion a year from gross written premiums.

Direct Line Group comes in second, with a market share of 10.8%. The group includes:

• Direct Line
• Churchill
• Darwin
• Privilege
• DriveExpert

In total, Direct Line Group makes £1.73 billion in gross written premiums.

Aviva takes the third spot, with a market share of 10.5%.

The group makes £1.18 billion in gross written premiums and includes brands such as:

• Aviva
• Quotemehappy
• General Accident

While there are over 195 different car insurance providers in the UK, the top 10 make up over 70% of the country’s market share.

This suggests that the UK car insurance market is highly concentrated, with a few large players dominating the space.

What are gross written premiums?

Gross premiums written refers to the total amount of premiums car insurance companies receive from policyholders for providing car insurance coverage.
The actual number of car insurance companies operating in the UK has dropped by 30% since 2014.

This could be in part due to larger companies acquiring smaller ones, as well as increased competition driving smaller companies out of business.

Other factors such as the COVID-19 pandemic may have played a role too.

The UK’s most trusted car insurance providers

Using reviews from Trustpilot and Which?, we found that LV= comes out with the best score overall. It scored 4.6 out of 5 on Trustpilot and 78% with Which?.

It’s closely followed by NFU Mutual, with an average of 4.18, and then by Saga, with an average review score of 4.08.

Formerly known as Liverpool Victoria, LV= is one of just a few providers that guarantees repairs for a vehicle’s lifetime and it also offers courtesy cars if yours is stolen.

NFU Mutual has been a trusted name in the insurance world for a long time and is one of the only brands not to charge a cancellation fee.

Size of the UK car insurance market

How much is paid out in car insurance premiums each year?

According to the most recent figures available, a total of £19.27 billion in gross motor insurance premiums are written annually in the UK.

Car insurance companies also pay out £11.84 billion in claims to policyholders.

The total value of premiums has seen a gradual increase over the years, going up by 21% since 2004. But the amount paid in claims has dropped by 6% in this time.

The market has experienced significant growth over the past decade, driven by factors such as:

• Increased car ownership
• Higher insurance premiums
• Changes to government regulations.

How does the UK car insurance market compare to other European countries?

The UK's £19.27 billion market puts the country in second place behind Germany and equates to a market share of 14.7%. This gives the UK a European market share of 14.7%.

Germany is way out in front with 19.3% of the market and a value of over £25 billion. As the continent’s biggest economy, this perhaps isn’t surprising.

France is the other major economy in Europe and comes in third with £18.87 billion, or a market share of 14.4%.

Italy and Spain complete the top 5 with £15.19 billion and £9.96 billion respectively.

How much do people spend on car insurance?

In 2021, household expenditure on motor insurance reached £3.15 billion. On the whole, spending on car insurance has gone up, increasing by 162% since 1997. However, it has seen significant changes in that time.

Household expenditure on car insurance peaked in 2020, at £4.01 billion. It hit its lowest point since 1997 in 2000 (£929 million).

What is ‘black box’ insurance and who uses it?

Black box insurance, also known as telematics insurance, is a type of car insurance that uses technology to monitor the driver's habits behind the wheel.

The technology typically involves a small device, installed in the insured vehicle, which collects data and sends it back to the insurance company.

Based on the data, the insurance company can adjust prices to reflect the driver’s habits, offering discounts for safer driving or higher premiums for riskier driving.

Overall, over a quarter (26%) of drivers have a black box insurance policy.

Black box insurance is often popular with younger drivers who may struggle to find affordable car insurance due to their lack of experience on the road:

• 63% of telematics insurance users are aged 25 and under
• Just 8% of black box users are 50 and over

By calculating premiums based on driving behaviours and usage, this insurance option rewards safer driving with more competitive prices. This makes it a more budget-friendly choice for conscientious young motorists.

By choosing black box insurance, younger drivers can demonstrate their responsible driving and potentially reduce their insurance costs.

How big of a problem is car insurance fraud?

In the UK in 2020 there were 55,000 fraudulent claims, with an estimated value of £602 million.

This was slightly down on the previous year when there were 58,000 claims at an estimated cost of £605 million.

While both the number and value of claims dropped, the decrease in the number (-5.2%) was much greater than that of the value (-0.5%). This means that the average value of fraudulent claims has increased.

There are several ways in which car insurance fraud can occur. For example:

• Faking an accident or injury to claim compensation from their insurance company
• Reporting a stolen vehicle that was never actually stolen to collect an insurance payout
• Providing false information when applying for car insurance
• Exaggerating the value of a vehicle to get a higher payout after an accident

Car insurance complaints

In the most recent quarter, there were over 4,300 complaints made to the Financial Ombudsman Service regarding various types of motor insurance.

The most common area of complaints by far is car and motorcycle insurance, with 3,686 enquiries, 543 of which were referred for an ombudsman’s decision.

The number of new complaints about car insurance has steadily increased over the last couple of years.

Complaints peaked in the third quarter of 2022/23, with 5,756 complaints lodged. The fewest complaints were received in the third quarter of 2021/22, with 3,499 complaints received.

While complaints about hire purchase have increased over this period, those for car or motorcycle insurance have stayed fairly stable.

Louise Thomas, Confused.com car insurance expert comments:
"The UK's car insurance market is now the second biggest in Europe, a figure that helps to put this past decade’s growth into perspective. But with this growth comes a car insurance market that's highly competitive and saturated, and this can be overwhelming for drivers who want to buy insurance.

"While many different car insurance providers exist in the UK, a few large players are dominating the space - with the top 10 making up over 70% of the country’s market share.

"The cost of car insurance has also changed considerably over the years, and household spending on car insurance has gone up by 162% since 1997. With car insurance being such a big expense, you need to take time to compare car insurance and choose a provider that offers the best service and price for you.

"While it's no secret that costs have risen over the years, the cost of your car insurance will ultimately depend on you. Factors such as your location, type of policy, driving experience and car make and model determine your overall price.”

FAQs

How can you check your car insurance coverage?

To check the details of your car insurance, the first place to look are your car insurance policy documents.

Your car insurance policy documents will contain all the details of your coverage, including the effective date of the policy and the amount of coverage you have.

You can call or email your insurance company to ask for information about your car insurance policy, or you may be able to check online.

You may be asked to provide some personal information, such as your policy number or date of birth, to confirm your identity.

What is car insurance excess?

Car insurance excess refers to the amount of money that you agree to pay towards a claim before your insurance coverage comes in.

For example, if you have a car insurance policy with a £500 excess, and you make a claim for £2,000, you pay the first £500. Your insurance company would then pay the remaining £1,500.

Car insurance excess amounts vary depending on the insurance company and the specific policy. In general, policies with higher excess amounts tend to have lower costs, while policies with lower excess amounts tend to have higher premiums.

It's important to note that excess only applies to certain types of claims, such as damage to your own vehicle, and not to third-party claims.

Be sure to review your car insurance policy carefully to understand how excess applies to your coverage.

Sources & methodology

How much does car insurance cost?
Average cost sourced from Confused.com car insurance price index data based on 6 million quotes and analysed to be representative of the market. TPO and TPFT data are based on Confused.com internal data only, without additional weighting.

Who are the UK’s biggest car insurance providers?
Market share by insurer sourced from NimbleFins’ Top 10 Largest UK Car Insurance Companies 2023

Number of motor vehicle liability and other motor vehicle insurance companies sourced from Statista.

Average ratings were taken from Trustpilot and Which?. The scores out of 100 from Which? Were converted into a score out of 5, to allow an average to be taken with the Trustpilot scores.

How big is the UK car insurance market?
Gross premiums written and motor claims paid sourced from Insurance Europe’s motor insurance statistics

Household expenditure on motor insurance sourced from the Office for National Statistics’ consumer trends dataset.

Number of telematics insurance customers sourced from Consumer Intelligence's car insurance price index.

How big of a problem is car insurance fraud?
Number and value of fraudulent claims sourced from the Association of British Insurers, accessed via Statista

Car insurance customer satisfaction
Number of customer complaints sourced from the Financial Ombudsman Service's quarterly complaints data: Q3 2022/23