“Take-up of telematics policies has always been higher with younger drivers in a bid to help them get on the road for less, but even this age group are now using the technology more – with 62% of the cheapest five quotes now telematics-based for the under-25s,” said Harriet Devonald, insurance pricing expert at Consumer Intelligence. “This is an almost 10% increase since the start of the pandemic.”
Consumer Intelligence’s latest Car Insurance Price Index indicated that the average cost of car insurance is now 11.4% below pre-COVID levels, with a 9.4% reduction in premiums in the last 12 months. The average motor premium in the UK is now £751.
The decrease in distance driven due to the pandemic has resulted in a huge reduction in motor accidents and claims. However, with traffic levels returning back to normal, motor premium price falls have begun to stabilise, with premiums slipping just 0.9% in the last three months.
Car insurance premiums fell across all driver age groups over the past 12 months. Under-25s had the largest yearly decrease at -10.5%, followed by motorists aged 25-49 (-9.6%) and over-50s (-8.2%).
While younger motorists got the largest decrease, insurance costs remain high for the cohort, at £1,589 for a typical annual policy, Consumer Intelligence said. This is in contrast to to £568 for a driver aged 25-49 and £353 for those over 50.
“Even with telematics policies working hard to keep pricing affordable, there is still a huge difference between our age groups,” Devonald said.
Five UK regions recorded double-digit premium drops in the past 12 months. The North East (-13.2%) saw the largest decrease, followed by the North West (-10.7%) and London (-10.4%). All UK regions posted significant falls over the 12-month period, with the South East (-7.3%) recording the smallest decrease.
Car insurance was the most expensive in London, with an average of £1,265, followed by the North West at £984. Premiums were cheapest in the South West, at £529 on average.