Motorists are facing the biggest annual price hikes in car insurance premiums in five years, with prices rising by £115 over the last 12 months, according to the latest Confused.com Car Insurance Price Index powered by Willis Towers Watson.
These year-on-year price rises of 19% are the steepest seen in five years (Q2 2011 = +25%), and means that drivers are now paying £715 on average for their comprehensive car insurance premium, compared to just £600 this time last year.
In terms of a quarterly increase, drivers face another blow, with prices rising by a significant 6% in Q2 2016, equating to an additional £44 on premiums over the last three months alone.
Insurance price increases of this magnitude, coupled with rising petrol prices and hikes in insurance premium tax, could well signal the end of the road for cheaper driving for motorists. And it’s a bleaker outlook for some than others.
Whilst no age group has managed to avoid price rises, younger drivers have been less impacted. The youngest drivers, 17 year olds, have experienced the smallest yearly price increases compared to any other age group - 8%. However, their average premium has once again broken the £2,000 barrier and now stands at £2,013.
Females aged 17-20 have also escaped the maximum hikes, however they’re still facing an annual price increase of 15%. Whilst this is lower than the national average, it still equates to a rise of £223 over the year, resulting in a current premium of £1,671 – a £94 increase over just three months (+6%).
In contrast, drivers aged 61 have seen the steepest annual rises, of 24% - the only comfort being that their premiums still only stand at £418 on average - £297 less than the national average. Male drivers aged 71+ have also been hit hard with a similar 24% annual rise, taking their average premium to £466 - £89 more than this time last year. And it’s a double-blow for older male drivers, with men aged between 41-45 experiencing the biggest quarterly increase of 9%, along with male drivers aged 61-65 (+9%).
Both men and women have seen their premiums rise substantially over the last 12 months, although men have seen prices creep up slightly higher than their female counterparts, by 21% (+£129 year on year) and 18% (+£98 year on year) respectively. The second quarter of 2016 has seen a further jump of 7% for men, and 6% for women.*
As a result, the average man’s premium now stands at £756 and women’s at £664. And it would seem that the gap in price between men and women’s premiums is widening, with a difference of £92 between the sexes in Q2 2016. In comparison, this time three years ago (Q2 2013), the gender price divide stood at just £27.
These steep increases in premiums are being felt across the UK, with no region escaping the annual hikes. And motorists in Northern Ireland have drawn the short straw, seeing their insurance premiums increase by 25% annually - the highest increase of any region in the UK. For these motorists, their average premium now stands at £863, making it £148 more expensive than the national average.
The outlook isn’t much better for drivers in Scotland, with those in the Scottish Highlands and Islands experiencing annual price rises of 24%. And there’s even more bad news for motorists in the Hebrides, who have seen eye-watering annual price increases of 42% over the year – the largest price increase recorded in this area since the Index began.
Drivers in London may also have cause to despair, with those in Inner London paying the highest premiums of any region in the UK - £1,164, a staggering £449 more than the national average. Motorists in West Central London are no better off, as they have experienced one of the greatest annual increases in premiums, of 36% (+£315).
The South West of the UK is also bearing the brunt of escalating insurance prices, with an annual increase of 20%. And some drivers within this region have been harder hit than most. Drivers in Dorchester have seen their policies increase annually by a staggering 31%, and quarterly by 16%, while motorists in nearby Taunton have experienced similar sky-high price rises of 27% over the year, and 13% over the quarter.
However, some regions have escaped relatively unscathed. Drivers in North and Central Wales have experienced quarterly price rises of just 2%, the lowest of any UK region, pushing prices up by just £12 for motorists in the area over the three month period, to stand at £572.
Amanda Stretton, motoring editor at Confused.com says:
“We’ve not seen price rises of this magnitude for five years – a 19% annual increase is substantial to say the least. And these price rises are being felt across the board, for drivers of all ages and genders, across all UK regions.
“If prices continue to rise at the rate we’ve been seeing, we could be facing the possibility of average comprehensive premiums breaching the all-time high seen in 2011, when they peaked at £858. This, combined with rising fuel prices and increased motoring costs across the board, could result in a sizeable dent in drivers’ pockets.
“However, we’re urging drivers not to worry. As ever, our advice to all motorists is to shop around at renewal using a site such as Confused.com, to make sure that they are getting the very best prices for their insurance and all their motoring needs.”
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Notes to Editors:
More than 4 million quotes are used in the construction of each quarter’s insurance price index - this makes it the most comprehensive insurance index in the UK. Unless otherwise stated all prices referred to are for comprehensive cover.
The following web pages will be updated to reflect the new figures and can be linked to: http://www.confused.com/car-insurance/price-index
*Car insurance for men is on average higher than for women, for example because certain male-dominated occupations have a poorer claims experience, which is reflected in the premium charged. Also, on average, more men drive larger and more costly vehicles.
Confused.com is one of the UK’s biggest and most popular price comparison services.
Confused.com was the UK's first price comparison site for car insurance. Launched in 2002, it generates over one million quotes per month. It has expanded its range of comparison products over the last couple of years to include home insurance, holiday insurance, pet insurance, small van insurance, motorcycle insurance, breakdown cover and gas and electricity, as well as financial services products including credit cards, loans, and life insurance.
Confused.com is not a supplier, insurance company or broker. It provides an, objective and unbiased comparison service.
By using cutting-edge technology, it has developed a series of intelligent web-based solutions that evaluate a number of risk factors to help customers with their decision-making, subsequently finding them great deals on a wide-range of insurance products, financial services, utilities and more. Confused.com’s service is based on the most up-to-date information provided by UK suppliers and industry regulators.
Confused.com is owned by the Admiral Group plc. Admiral listed on the London Stock Exchange in September 2004. Confused.com is regulated by the Financial Conduct Authority.