UK drivers face first car insurance uptick in two years

Drivers in the UK are paying more again for car insurance after the average premium rose to £719, an £8 increase over three months. Experts warn the trend could continue, especially at renewal time, as insurers face rising costs from claims.

By the time many drivers get to the point of renewing their car insurance, the bill is supposed to be a little easier than it was the year before. Instead, for the first time since the start of 2023, prices have edged up.

New data shows the average car insurance policy now costs £719, an £8 increase compared to three months ago. The movement is small, but it breaks a pattern drivers have come to rely on in recent years. While prices have fallen by five per cent. or £38. over the last 12 months on average. experts say the future could be harsher—potentially carrying renewal premiums upward just as households are already stretched by the cost of living.

Confused.com warned that the slide in prices may be starting to stall. The comparison site cautioned that if prices continue to rise, drivers “will be paying more for their insurance than they have done before.”

For Matt Crole-Rees, a motoring expert at Confused.com, the worry is timing. He said drivers have “benefitted from car insurance price drops for some time now. ” but now they’re seeing prices “start to increase slightly in recent months. ” meaning motorists could face price increases when they renew. He pointed out that it doesn’t have to be a free pass to higher costs. Shopping around before renewal, he said, can still deliver savings.

The numbers behind the pressure tell a clearer story. Although insurers have reduced premiums for many drivers. they are doing so against a backdrop of claim costs that have been climbing sharply. Data shows that while insurance prices have fallen on average. the costs insurers must pay when something goes wrong are rising.

Between 2020 and 2025. average claim costs changed dramatically across categories: theft jumped by 64 per cent from £11. 067 to £18. 123; fire rose by 99 per cent from £6. 440 to £12. 799; accident costs increased by 40 per cent from £3. 748 to £5. 247; damage climbed by 105 per cent from £2. 439 to £4. 990; and storm and flood rose by 19 per cent from £6. 70 to £8. 003. Windscreen claims increased by 44 per cent, moving from £243 to £350.

Crole-Rees tied those increases to how insurers calculate risk. He said car insurance prices are “generally calculated based on risk and claims. ” and while there have been fewer reported claims in recent years. insurers are being forced to pay more when claims are made—“it’s more expensive for insurers to rectify.” That means drivers can’t directly control some of the forces pushing premiums up. he said. but they can still reduce what they pay by being proactive.

The guidance offered is practical. and it’s also urgent: buying car insurance around 28 days before the renewal deadline could lead to prices dropping by 53 per cent compared with buying on the renewal date. Crole-Rees also urged drivers to “be organised. ” framing it as the difference between absorbing a higher renewal price and finding an alternative before the market shifts.

Across the past year. the average premium has declined. with prices now five per cent lower than 12 months ago. yet the report makes one thing plain: the downward momentum is no longer as reliable as it has been. And when the average premium is £719—an £8 rise over three months—the question for drivers is no longer whether prices will move. but how much they might move next.

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