Car Insurance Prices Just Rose for the First Time in Two Years, New Data Shows

Car insurance premiums have risen for the first time in more than two years, according to the latest Confused.com Car Insurance Price Index, built with WTW from more than six million quotes. The average policy now costs £719, up £8 on the previous quarter. It is the first quarterly increase after prices peaked at £995 in December 2023.

The rise looks small on its own. But it breaks a run of nine straight quarterly falls, and the data behind it points to a change in direction that will land on drivers at their next renewal, not just in the headline average.

What the New Data Shows

Prices are still down £38, or 5%, compared with a year ago. That annual fall is far smaller than the 14% drop recorded over the same period the previous year, and the index shows the deflation has been losing pace for months. Three of the last five months already recorded a price increase, not a fall, a pattern that had not shown up once in nearly two years of index data.

Nearly half of drivers, 49%, saw their renewal quote go up in the past three months, by £70 on average. Of those, 46% shopped around and switched, saving £82 on average. Just over one in five drivers, 22%, got a cheaper renewal quote outright, and most of those stuck with it rather than switching, missing out on further savings that were still there for the taking.

Confused.com’s own customer data points to the reason. The average cost of a paid-out claim has climbed 42% from 2020 to 2025, from £3,842 to £5,464, even as the number of claims made has dropped by 59% over the same period. Fewer drivers are claiming, but each claim now costs insurers far more to settle, and insurers are passing that cost on through the premium rather than absorbing it.

The breakdown by claim type shows where the pressure is coming from. Damage claims have more than doubled in cost from 2020 to 2025, up 105% to £4,990. Fire claims have nearly doubled too, up 99% to £12,799. Theft claims are up 64% to £18,123, and even a windscreen claim now averages £350, up 44%. Cars fitted with cameras, sensors and driver assistance systems cost more to fix, as a repair often means recalibrating that equipment at a specialist workshop, and a written-off or stolen car costs far more to replace than it did five years ago.

Who Is Paying More Right Now

The pain is not spread evenly. Drivers in their fifties have seen the sharpest recent rises: 51-year-olds are paying £36, or 6%, more than they were three months ago, and 50-year-olds are paying £29, or 5%, more. Younger drivers are still seeing their premiums fall. Seventeen-year-olds now pay £1,695 on average, down £356, or 17%, on the year, and 18-year-olds pay £2,042, down £287, or 12%.

Drivers aged 71 and over are the only age group to see their premium rise on an annual basis, up £2, or 1%, compared with a year ago. It is a small figure, but it marks the end of a multi-year run of falling prices for a group that already pays some of the highest premiums on the road.

Regionally, Northern Ireland has been hit hardest. Premiums there are up £168, or 20%, over the past year, to £1,020 on average, and up a further £73, or 8%, in the past three months alone, making it the second most expensive region in the UK behind Inner London. Scotland is also running against the national trend, with prices 1% to 2% higher than a year ago. South Wales has seen a 4% rise in the past quarter. By contrast, drivers in Manchester and Merseyside are still saving 10% year on year, an average of £89, and Inner London drivers are paying £97, or 8%, less than they were 12 months ago, though even there prices ticked down only slightly in the latest quarter rather than falling as fast as before.

Car insurance now costs 38% more than it did five years ago. Confused.com’s own research found that 46% of drivers have had to make a financial sacrifice, such as dipping into savings or cutting other spending, to cover the cost of their cover, and one in five call it one of their biggest household bills. For a household already managing a mortgage or rent alongside energy and food bills, a renewal letter that lands £70 higher than last year’s is not a rounding error. It is a bill that has to come from somewhere else in the monthly budget.

What Comes Next

Matt Crole-Rees, motoring expert at Confused.com, said the sharp price falls of the past two years “appear to have subsided” and that drivers “could soon see their price increase when it comes to their renewal.” He pointed to the cost of claims, not driver behaviour, as the reason: “This isn’t something drivers can control, but it doesn’t mean to say they can’t still save money on their insurance.”

WTW’s UK head of pricing, Tim Rourke, has separately flagged wider inflation risks, including supply chain disruption tied to the conflict in the Middle East, as a further factor that could push premiums up over the coming months, though he noted that higher fuel costs could partially offset that if they cause drivers to cut their mileage.

Neither insurer nor regulator publishes a running total of how much of the recent rise is down to genuine repair inflation and how much reflects insurers rebuilding margin after two years of aggressive price cuts aimed at winning market share. The Financial Conduct Authority tracks general insurance value measures data and can act if it finds firms are not offering fair value, but that data lags the market by months, leaving drivers to judge the fairness of a renewal quote largely on their own.

How to Fight Back at Renewal

Drivers do not have to accept a renewal quote at face value, and the data shows real money is still on the table for anyone willing to shop around.

• Quote 28 days before renewal, not 10. Confused.com’s data shows getting a quote 28 days ahead of renewal can be 53% cheaper than buying on the day itself. Most drivers currently shop just 19 days out and hold off buying until 10 days before, well inside the window where prices climb.
• Always run a comparison, even on a cheaper quote. Of the drivers who got a lower renewal price this year, 17% still switched and saved a further £79 on average. A lower number from your existing insurer is not proof it is the best price available.
• Declare your mileage accurately. Underestimating your annual mileage to get a cheaper quote can invalidate your policy if you are involved in a claim. It can also backfire: drivers who log around 4,000 miles a year pay £772 on average, more than the £614 paid by drivers who cover 12,000 miles, as low mileage can read to an insurer as inexperience behind the wheel rather than lower risk.
• Add a named driver if it reflects real use. Sole drivers pay £811 on average, compared with £697 for those who correctly declare a second driver on the policy. Only add a name if that person will actually use the car: an inaccurate declaration can also void a claim.
• Improve your car’s security. A steering wheel lock, tracking device or a well-lit, off-street parking spot can all bring the quoted price down, on top of the immobiliser and alarm most cars already carry as standard.

None of these steps will reverse the wider trend in claims costs driving prices up. But with the market shifting for the first time in two years, drivers who treat their renewal date as a deadline for action, rather than a bill to pay, are still the ones most likely to avoid the increase altogether.

Motoring Chronicle has covered the record £3.2 billion insurers paid out in claims support in the second quarter of 2026, and what it could mean for renewal prices, in our earlier report on record motor insurance payouts.

Sources:

• Confused.com: Car insurance prices start to creep up for UK drivers, new data reveals
• WTW: Car insurance prices see first quarterly rise in over two years