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Has car insurance gone up in 2022?

The cost of car insurance went up  by 2% over the past 12 months. The average cost of a comprehensive car insurance policy is now £550 - an increase of £12 over last year. That's according to our car insurance price index, powered by Willis Towers Watson.

But why have these costs gone up, and who's been hit hardest? Let's take a look.

Have car insurance costs gone up in 2022?

During the first 3 months of 2022, drivers paid 2% (£12) more than the previous year. This is the first annual price rise in 18 months.

Our research also shows a quarterly increase in the cost of car insurance. Prices are 4% (£21) higher in March 2022 than they were in the previous 3 months.

Why has car insurance gone up?

Car insurance prices saw a steady fall in each quarter in 2021, possibly as a result of shifting driving habits during the Covid-19 pandemic. With more people working from home and fewer commuters, it stands to reason that there might be fewer accidents.

In fact, our research shows that drivers reported cutting their annual mileage by more than 40% during the 2020 lockdown**.

And police forces across the UK reported a 26% drop in the number of road accidents they attended.+

As things start to go back to a state somewhat resembling normality, there's an increase in road traffic, meaning an increase in claims. And this is reflected in how much drivers pay for their car insurance. This could be one of the reasons why car insurance has gone up.

How have car insurance prices changed over the past few years?

Car insurance costs started to creep up during 2019 and 2020. But then the nationwide shift in driving habits helped to keep prices in check. And as we start to return to the way things were, we're seeing prices going up again.

Period Average car insurance cost
Q1 2018
£593
Q1 2019
£589
Q1 2020 £625
Q1 2021

£538

 Q1 2022 £550 

Insurance ‘loyalty penalty’ scrapped but customers could still save

In January 2022, the Financial Conduct Authority (FCA) stopped insurance companies hiking up prices for loyal customers.

Before this, insurance companies would often give discounted policies to new customers. This usually meant that loyal customers saw higher prices to compensate for this.

Now, insurers can't penalise existing customers in this way. But that doesn't mean that you're guaranteed to get a cheaper policy. In fact 1 in 5 (21%) drivers wrongly believed that this new ruling meant they'd get cheaper car insurance prices. In fact, our research found that 2 in 5 (42%) drivers who had their renewal last quarter saw their prices go up by £39, on average*. 

These figures see car insurance rises across the UK. But some people might still find that their car insurance costs have actually gone down. Drivers in Bolton, for example saw the biggest price annual price drop of £31 (4%), paying £693. 

This is why it's still worth shopping around. Even if your renewal is less than you thought, or is slightly less than the previous year, there are still savings to be made. More than a quarter (26%) of those who saw their car insurance go up saved £59, on average, by switching insurers.

And if you're looking for ways to save even more, check out our tips for cheaper car insurance.

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Male drivers pay more than women

Male drivers saw their prices rise less than women. Their car insurance costs were 2% (£13) more than last quarter. They're paying £587, on average.

Female drivers also saw an increase of 2% compared to last quarter, but this equates to a rise of £10. They're currently still paying more than women for their insurance, at £487, on average. 

Male drivers 'riskier' to insurers

The EU Gender Directive means insurers can't work out insurance prices based on whether a driver is male or female. But there are other risk factors that mean men could have higher premiums. 

For example, male drivers tend to drive more expensive cars, with bigger engines and/or newer technology. This usually makes for higher-value claims in the event of an accident. 

Male drivers also tend to have more motoring convictions than female drivers. 

Lowest price on record for 17-year-olds

It's widely known that younger drivers tend to have much higher insurance costs than older, experiences drivers. Drivers aged 18, for example, paid £1,419 for their policies - almost triple the national average.

But 17-year-old drivers are actually enjoying the lowest prices on record for their age group. They're paying £1,166, on average, which is £83 (7%) lower than last year.

This could be due in part to the pandemic impacting driving tests for months at a time. With fewer new young drivers on the road, there's a decreased risk of accidents involving 17-year-olds. This in turn could reduce the average car insurance price for that age group.

It's often thought that your car insurance costs drop once you hit 25 years of age. While this isn't always the case - and it one of the more common car insurance myths - at a national level there might be some truth to it.

According to our research, car insurance costs tend to dip below the £1,000 mark once drivers reach the age of 24.

Other motoring costs on the rise

In addition to this quarterly rise in the cost of car insurance, other motoring costs are also on the rise.

According to our fuel price index, fuel prices have been on the up since May last year. Petrol costs £1.63 per litre, and diesel costs £1.76, on average (prices correct as of April 2022). This is an increase of 35p per litre for petrol and 36p per litre for diesel.

You can check petrol prices in your local area and see if you can get cheaper fuel elsewhere. And there are ways you can improve your fuel economy too.

For more tips, check out our guide on how to save money on your motor.

New rules 'make the market more competitive'

Louise O’Shea, Confused.com CEO, says:

“It’s worrying that so many people believed the pricing changes that came into effect in January would guarantee them a cheaper price, and I have no doubt they had quite a shock when they received their renewal notice and it was higher. This is purely down to the fact that the cost of insurance is going up, and this stands for renewal prices too.

“Data proves that there still is the need to shop around. Yes, prices have increased. But it’s likely that there another insurer can offer a better price for the cover you need, as the market is more competitive than ever."

 

* How did we get these figures?