Did your car Insurance renewal quote move the way you expected?

Here’s a statistic that doesn’t quite add up at first glance: UK motor insurers paid out a record £11.9 billion in claims across 2025 and yet, for most of that year, the average premium was falling [1]. If your renewal quote didn’t move the way you expected, this gap explains why.

A Confusing Year for Drivers

On paper, 2025 looked like good news. The average motor premium fell for three to four consecutive quarters, dropping from a 2024 peak of around £635 to £559 by year-end [2][3]. By Q1 2026, the average sat at £560 — roughly £20–30 lower than a year earlier [1].

But underneath that falling average, costs kept climbing. Insurers paid £2.9 billion in claims in Q1 2026 alone, with repairs eating up £1.9 billion, up 3% on the previous quarter. The average accidental damage claim reached £3,699, an 8% jump in a single quarter [1].

Why the Gap Exists

Modern cars are the biggest driver. Vehicles packed with sensors and driver-assistance tech are safer, but far more expensive to fix — a cracked bumper can now mean recalibrating a camera, not just a respray [1]. Add a shortage of skilled technicians and detected fraud costing the industry over £1 billion a year, and the upward pressure hasn’t gone away even as headline prices have fallen [1].

So how did premiums drop? Intense competition. With fewer people shopping around, insurers fought hard for those who were, pushing new-business prices down even as their claims bills grew [4] — a dynamic that rewards switching and quietly penalises loyalty.

What This Means for You

This isn’t a sign insurance is getting cheaper overall. It’s a sign the market is far more competitive at switching than at renewal. If your policy has auto-renewed for a year or two, there’s a real chance you’re paying yesterday’s rate rather than today’s.

Let’s Take a Look Together

Before your next renewal lands, get in touch, and we’ll check whether you’re still getting a fair deal — and that your cover still fits your circumstances, not just your budget.

Sources

1. Association of British Insurers (ABI), Motor Insurance Premium Tracker, Q1 2026 — https://www.abi.org.uk/news/news-articles/2026/4/motor-premiumsremainstablebutcost-ofrepairsstill-high/
2. Association of British Insurers (ABI), “Three straight quarters of falling motor premiums” — https://www.abi.org.uk/news/news-articles/2025/11/three-straight-quarters-of-falling-motor-premiums/
3. Brumble, “Will Car Insurance Get Cheaper in 2026?” — https://brumble.co.uk/guides/what-to-expect-from-car-insurance-in-2026
4. Consumer Intelligence, “UK Home and Motor Insurance in 2026” — https://www.consumerintelligence.com/articles/uk-home-and-motor-insurance-in-2026-calm-averages-noisy-reality-and-why-context-will-matter-more-than-ever