Fall in premiums only offers short-term relief

Comprehensive car insurance premiums fell by five per cent in the last three months, according to the latest Confused.com Car Insurance Price Index produced in association with WTW.

A £54 decrease means average comprehensive premiums are now £941.

However, this is still 43% (£284) higher than they were 12 months ago and prices are expected to rise again in the coming months.

Tim Rourke, UK Head of P&C Pricing, Product, Claims and Underwriting at WTW, said, “After a series of record highs in 2023 took car insurance premiums into uncharted territory, the latest pricing data suggests the relentless rise in prices may finally be turning a corner. Even with inflation easing, however, more vehicles with advanced technology that require complex and expensive repairs and higher rental vehicle costs, increased frequency and severity of claims and ongoing supply chain issues risk a perfect storm of issues that can be expected to continue to put pressure on car insurance premiums.”

Steve Dukes, CEO at Confused.com, added, “While the cost of car insurance may have dropped at the beginning of this year, customers are still paying historically high prices for their car insurance. Premiums are still more expensive year-on-year, so as an industry, there’s still an important role to play in helping customers to understand where they could be saving money.”