Despite Lockdowns, Car Insurance Costs Are On The Way Up

New research from Britain’s leading price comparison website, MoneySuperMarket, reveals that car insurance premiums started to rise in the final quarter of 2020, after four consecutive quarters of falls.

The news is surprising given that car insurers have saved a great deal of money on claims during 2020, as a recent survey by Hello Safe noted. They estimated that repair costs had fallen by over 50%, and car accidents had fallen by over 40%. Many car insurers have given refunds over between £30-£45 during 2020 as drivers have been unable to use their vehicles. More info on that Hello Safe study here by the way. 

The cost of an average fully comprehensive car insurance premium in Q4 2020 was £490. Prices had fallen gradually over 2020 – partly as a result of people driving less due to lockdown restrictions. However, premium costs jumped 3.6% from £473 in Q3 to take them to their current levels. Though quarterly prices increased, year on year premiums, showed a slight decrease from Q4 2019 (£503) to Q4 2020 (£490).

The research also explores how location impacts a driver’s premium price. Drivers in East London pay the most (£955), almost twice the national average (£490) and £265 more than the average premium paid by London drivers as a whole (£690). Licence holders in Kirkwall in the Orkney Islands have the cheapest premiums in the country (£269) – £686 cheaper than those in East London.

Photo by Tim Mossholder on

Gender continues to have an impact on premium rates. Female drivers over the age of 65 pay the least for their car insurance at £251 – £239 less than the national average of £490. Males aged 20-24 pay the most (£1,143) – £348 more than females of the same age (£795).

Given that many people now choose to transition from one gender to another, it will be interesting to see if men who identify as female – or they/them – receive cheaper car insurance quotes. If not, perhaps they could pursue legal action because they aren’t being given the same discount as those who were born female? This is potentially a serious issue for car insurers and the days of having just two dropdown menu choices on quote pages are surely coming to an end.

Looking at age, premiums have fallen the most year on year for drivers aged between 17 and 19: the average price is down by 19% in the past 12 months now costing an average of £802 – down from £995. Premiums for this age-group also fell £21 over the quarter from £823 to £802. The 20-24 age group pays the most on average, with Q4 premiums costing £980. This compares to drivers aged 65 or more who pay the least – an average of just £274 a year.

Kate Devine,  car insurance spokesperson for MoneySuperMarket, commented: “Our research shows that after a year of falls, prices have started to rise again – something which could be explained by the fact that roads were busier for much of Q4 due to looser lockdown restrictions in many parts of the country.

“It’s hard to say to whether the rises will continue, though. With new lockdown measures now in place following the Prime Minister’s announcement on Monday, a major fall in traffic could lead to lower prices – at least in the very short term.

“If your policy is up for renewal, the best way to make sure you’re getting the right policy for your needs is to shop around for a better deal – doing so can save you up to £280.”

About alastair walker 11373 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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