UK car insurance statistics: Average cost and number of claims

Despite car insurance being a legal requirement, some drivers in the UK are choosing not to insure their cars. We have carried out research to find the stats behind car insurance claims, uninsured drivers and the technology that can help reduce your car insurance cost.

UK car insurance statistics: Highlights

• As of September 2023, the average cost of car insurance is £561 a year.
• The average cost of car insurance increased by 29% in the year to September 2023.
• In 2023, insurers will pay out approximately £9.8 billion for an estimated 6,500 claims.
• Men pay around 5% more than women for car insurance premiums.
• Inner London residents paid the most for car insurance, with premiums that are 63% more than the UK average.
• 20-year-olds pay 159% more than the UK average for car insurance in 2023.
• The average British driver wouldn’t claim for damage costing under £667.
• 5% of drivers say they would never claim on their car insurance, which is around 1.83 million Brits.

What is the average cost of car insurance in the UK?

The average price paid for motor insurance from July to September 2023 was £561 a year, an increase of 29% compared to the same time last year when the average cost of car insurance was £436 a year.

The price of car insurance has been rising in each quarter of 2023. The average price of car insurance in the second quarter was £511, 7% higher than the average of £478 in the first quarter. Prices then increased again by 9% between July 2023 and September 2023.

As of September 2023, reports show that insurance premium tax (IPT) makes up 12% of every premium.

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• Table

While the figures from the Association of British Insurers (ABI) show the average price of car insurance to be £561 per year, other indices indicate that the average price of car insurance premiums could be higher – as high as £900 or £1000.

For example, the Consumer Intelligence index found that quoted motor insurance premiums in the UK saw a record 61% increase in the year to August 2023.

How many car insurance claims are there per year in the UK?

In 2023, there will be around an estimated 2.4 million car insurance claims in the UK, and insurers will pay out an amount in the region of £9.8 billion to policyholders for theft, vehicle repairs, replacement vehicles and personal injury. This is the equivalent of insurers paying out £26.8 million a day for approximately 6,500 claims.

The amount paid out for motor insurance claims in the second quarter of 2023 was £2.5 billion, an increase of 29% on the amount paid in the same period in 2022, which was around £2 billion.

What is the average cost of car insurance by age?

Younger drivers tend to pay more for car insurance as they are considered higher risk. According to one set of market figures, the average price of comprehensive car insurance for a 20-year-old is £2,395 a year, which is a whopping 159% more than their reported UK average.

Meanwhile, the average price of comprehensive car insurance for a 65-year-old is £529, which is 43% lower than their reported UK average.

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Do men pay more than women for car insurance?

By law, gender should not affect car insurance premiums. However, a lot of market data shows that men tend to pay more than women for car insurance, with one 2023 report suggesting that men pay 5% more on average for motor insurance premiums than women.

What is the size of the UK car insurance market?

The UK motor vehicle insurance market is estimated to be worth £19.9 billion in 2023. A total of 169 businesses operate in the space, with around 36,000 employees in total.

How many Brits claim on their car insurance?

The average British driver wouldn’t claim for damage costing under £667, according to our survey research. Over 1 in 10 drivers (11%) wouldn’t claim for anything under £1,000, and this includes 2% who would pay up to £5,000 worth of damages themselves. At the other end of the scale, almost 8% would claim for any damages worth up to £100, and 2% of these would claim for any damages, no matter how small the repair cost.

95% of drivers say they would claim on their insurance if necessary, but 1.83 million drivers (5%) say they would never claim despite having to pay for it every year as a legal requirement in the UK. The most common reason for not claiming was that drivers thought the cost of the excess would likely exceed the cost of repairs, with 51% of drivers listing this as their reason to not claim. Following this, drivers were concerned that claiming would increase their premiums in the future (46%). Meanwhile, under a quarter of drivers (22%) said they wouldn’t submit a claim because it was too much hassle.

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• Table

What is the average cost of car insurance by region?

According to the same index, the price of car insurance premiums also varies significantly by region. Those in Inner London can expect to pay the most, with an average price of £1,503 for car insurance, 63% higher than their reported UK average.

On the other end of the spectrum, those in the South West are paying an average of £597 for car insurance, which is 35% lower than the UK average reported in this index.

• Car insurance statistics: 2022

  Overview of car insurance in the UK

  • £436 is currently the average cost of a car insurance policy in 2022.
  • £24 fall in the average insurance policy cost from 2020.
  • The average cost of repairing a vehicle under a policyholder’s own motor policy is just over £3,000.
  • 23% of those aged 21-29 have a black box installed as part of their insurance policy.
  • Over 11 million drivers in the UK recorded using dash cams.
  • 79,000 motorists were caught driving illegally without insurance in 2018.
  • 47.78% of drivers admitted to doing things while driving that distract from the wheel, meaning there were an estimated 15 million dangerous drivers on the road in 2018.
  • 5.82% of men admitted to driving after having a drink or taking medication, compared to just 3.93% of women.
  • The average British driver wouldn’t claim for damage costing under £667.
  • 5% of drivers say they would never claim on their car insurance (1.83 million Brits).
  • The most common reason for not claiming was that the cost of the excess would likely exceed the cost of repairs.
  • Over a fifth of drivers (22%) said they wouldn’t submit a claim because it was too much hassle.
  • Generation Z would wait until damages reach over £1,000, while the silent generation would claim at £437.
  • Interestingly, 7% of millennials would never claim on their car insurance.

  Average cost of car insurance in the UK

  The cost of car insurance has been the hot topic of discussion for many UK drivers, with policies seeming to rise year on year. However, since 2017, the average policy cost has actually been decreasing. In fact, in 2020, the average cost of a car insurance policy is currently £460, the lowest level in 4 years.

  Most common types of car insurance claims

  Third-party claims are the most common in the UK, at 44%. As third-party-only insurance is the minimum legal requirement for driving a car on UK roads, that is not surprising.

  This is closely followed by claims for windscreen damage, which is less expected, considering windscreen cover is often an added extra to many car insurance policies, and not included as standard.

  Own damage and fire bring up the rear in claims, which might indicate that people are less likely to claim for damage to their own car, as they are for damaging someone else’s vehicle.

  What impacts car insurance prices?

  Insurance prices have fluctuated since ABI records began in 2010 – but what impacts prices? We explored some of the possible reasons.

  Age

  The amount Brits are paying for car insurance varies massively depending on age. Explore the graphic below to find out more.

  Drivers aged 20 and under pay the most, with their car insurance costing £374 more than the next highest age group. Those in their 60s pay the least for car insurance, at £272 a year on average.

  Insurance premium tax

  One factor that can be identified as affecting the cost of motor insurance is insurance premium tax.

  The government first introduced this tax in the early 90s, mostly to make up for the fact VAT does not apply to the insurance industry. While this is supposed to be a tax on insurers, the extra cost is usually passed on to customers through higher premiums.

  Insurance premium tax has increased significantly over the years, as indicated in the table below.

  Some types of car insurance are subject to a tax rate of 20%, including insurance for vehicles used for people with disabilities and policies taken out with a car dealership when buying a new car.

  How many uninsured drivers are on the roads

  Motor insurance companies all have to contribute towards the Motor Insurance Bureau scheme, which compensates individuals injured by uninsured or untraceable drivers. This is ultimately paid for out of insurance premiums. So, how many drivers are driving illegally?

  • As of 2020, more than 2 million cars have been seized by the Motor Insurers’ Bureau (MIB) since 2005.
  • 79,000 drivers were caught driving without insurance in 2018.
  • This is a 33% reduction compared to 2017, when 118,000 drivers were caught.
  • 872 of these offences in 2018 were committed by individuals under 17 years of age.

  How many drivers use dash cams

  Dash cams are becoming increasingly popular amongst drivers in the UK. These handy little dashboard-mounted cameras record the road ahead and can prove very useful if you’re ever caught up in an accident.

  • Over 11 million drivers use dash cams in the UK.
  • 27% of drivers are using dash cams in the UK.
  • 72% of drivers believe all drivers should use a dash cam.
  • Some insurance companies may even offer a discount if you have a dash cam fitted.

  Black box insurance

  Telematics or black box insurance is a type of policy that calculates your insurance premium based on your driving performance. This is measured by a GPS box fitted in your vehicle that reports on your performance behind the wheel.

  These policies have become much more popular in recent years as they typically offer cheaper premiums, sometimes in return for certain driving restrictions (such as total mileage or time of day).

  Sources

  • Aviva
  • Insurance Post
  • Money Advice Service
  • RAC
  • ABI

  Click here for more research. For all media enquiries, please contact:

  Matt Mckenna
  UK Communications Manager
  T: +44 20 8191 8806
  

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