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.
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.
| Quarter | Average price of car insurance |
|---|---|
| Q3 2023 | £561 |
| Q2 2023 | £511 |
| Q1 2023 | £478 |
| Q4 2022 | £470 |
| Q3 2022 | £436 |
| Q2 2022 | £419 |
| Q1 2022 | £416 |
| Q4 2021 | £440 |
| Q3 2021 | £429 |
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.
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.
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.
| Age | Average price of car insurance |
|---|---|
| 20 | £2,395 |
| 35 | £1,103 |
| 25 | £1,566 |
| 45 | £898 |
| 55 | £660 |
| 65 | £529 |
| 71+ | £584 |
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.
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.
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.
| Reason for not claiming | Percentage |
|---|---|
| My excess would likely outweigh the potential cost of repair | 51% |
| I would be worried that my premium may increase in the future | 46% |
| I wouldn't want to lose my no-claims bonus | 44% |
| Hassle e.g. submitting evidence, finding an approved repairer | 22% |
| I would always claim on my car insurance, no matter the amount | 10% |
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.
| Region | Average price |
|---|---|
| Inner London | £1,503 |
| Outer London | £1,187 |
| Manchester / Merseyside | £1,154 |
| West Midlands | £1,139 |
| Leeds / Sheffield | £1,053 |
| Northern Ireland | £949 |
| East Midlands | £914 |
| South Central | £888 |
| North West | £877 |
| North Midlands | £844 |
| Central Scotland | £820 |
| North East | £798 |
| North | £787 |
| South East | £776 |
| East | £769 |
| South Wales | £730 |
| South | £716 |
| West | £687 |
| East & North East Scotland | £675 |
| Scotland - Highlands & Islands | £654 |
| Wales - Central & North | £613 |
| Scotland - Borders | £602 |
| South West | £597 |
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