They have proved hugely controversial, but 20mph speed limits appear to be making car insurance cheaper.
This week a leading price comparison website reported the biggest annual drop in UK car insurance prices in more than 10 years, with the average cost of cover falling by £161 – or 16% – in the past 12 months.
After a turbulent couple of years during which many drivers were hit with record premium hikes and some saw their costs double, that represents some much-needed good news. But car insurance still typically costs a lot more than it did: the average UK premium is 33% higher than it was two years ago, just before the huge rises that took effect in 2023.
Confused.com, which released the data, says drivers can now expect to pay an average of £834 for comprehensive car insurance. That is down from £995 a year earlier, and is the lowest price recorded in 18 months.
While some of this fall has been attributed to renewed competition between insurers and improvements to safety features in vehicles, the chief executive of Confused.com, Steve Dukes, also points to the speed control zones that have been introduced in many areas.
“Some UK insurers are observing that areas where 20mph zones have been introduced result in lower levels of claim frequency – a key factor in the cost of car insurance,” he says.
“Though many drivers find these reduced speed zones frustrating, it’s positive to see the bright spot this is creating for drivers’ costs.”
In recent years, the introduction of 20mph speed limits has become a flashpoint in some areas. Wales brought in a default 20mph limit in built-up areas in September 2023 – but, after a backlash, the Welsh government indicated that some stretches of road would revert to 30mph.
In England, cities including London have been rolling out 20mph zones. Transport for London says almost 165 miles (265km) of its roads are now subject to this speed limit, with more schemes in the pipeline. This week, it was reported that a 20mph limit is expected to be introduced on roads in residential areas across Manchester as well as in the city centre.
The first indications that 20mph zones could bring down the cost of car insurance – as well as cutting speeds and reducing road casualties – came in June last year, when the car insurer esure reported that vehicle damage claims in Wales fell by a fifth after the default limit was introduced.
The company said at the time that the speed restriction was “clearly having an impact”,” and it later said that the average driver could be looking at a £50-a-year saving on their motor insurance if the zones were rolled out across UK towns and cities.
Confused.com said that while the average price of a new policy is more than £160 cheaper than a year ago, it was customers who were shopping around who seemed to be benefiting from these savings. In fact, more than half of motorists who received a renewal quote during the last three months of 2024 claimed their premium had increased by £78 on average, according to a separate poll by the company.
Meanwhile, some motorists are seeing bigger price drops than others. Younger drivers are typically benefiting from the biggest savings, said the company.
Its figures came after other research also indicated car premiums were falling.
And the good news for motorists is that the reductions could continue. Earlier this month, the pricing consultancy Pearson Ham said: “We anticipate further declines in 2025, with competitive pressures likely to drive additional reductions over the coming year.”
Source: theguardian.com
