You may have noticed that your insurance premium has increased compared to previous years. Unfortunately, this isn’t just GoSkippy, It’s a trend seen across the entire industry. According to the Association of British Insurers (ABI), the average car insurance premium reached £627 at the end of 2023, marking a 34% increase from the year before and the highest level since ABI began tracking the data in 2012 (ABI).

However, new figures from Q2 2025 show a welcome drop, with the average premium now at £561, down 10% year-on-year compared to 2024. While the drop is encouraging, premiums are still nearly 30% higher than in 2021, when the average was around £436. So, although prices are easing slightly, they remain significantly elevated compared to pre-inflation levels.

This drop in premiums comes despite insurers spending a staggering £2.6 billion on motor claims in Q2 2025, a 22% increase compared to the same period in 2024. Rising claims costs continue to put pressure on insurers, even as premiums begin to stabilise.

You may have noticed your insurance premium isn’t the only bill rising, with groceries, electricity, and streaming services also increasing. Though we may not face the same cost-of-living pressures, insurers are still dealing with rising claims and inflation.

Why are claims costs rising?

Even with the recent dip in premiums, claims costs continue to surge due to several key factors:

Repair costs: When submitting an insurance claim, repairs are frequently necessary. The expenses associated with parts and labour have surged due to supply chain issues, inflation, and labour shortages.  In Q3 of 2023, the cost of vehicle repairs jumped 32% reflecting rising costs, energy inflation and more expensive repairs (ABI).

Vehicle theft: Up 35% in Q3 of 2023, leading to an increased number of claims (ABI).

Inflation: Higher costs are primarily attributed to inflation (the rate at which prices are rising). Consequently, it’s becoming more expensive for insurers to carry out repairs on your vehicle or property.

Payout amounts rising: In cases where your vehicle is deemed a total loss, we as insurers compensate you based on its current market value. With inflation affecting the value of vehicles, the payout amounts are also rising, placing further strain on insurers.

What can I do to reduce my car insurance premium?

Firstly, you should always be honest in your answers. Purposefully leaving important information out is known as misrepresentation or lack of disclosure which can not only be fraudulent but can also lead to serious issues in the event of a claim, in the most serious cases policies can be voided and no payout made.

1. Timing your renewal:  Drivers in urgent need of coverage and seeking quick insurance are prone to facing higher premiums. Give yourself time to secure the best rates.
2. Pay Annually: Though paying annually involves a greater upfront cost, it can actually save you money long term. By paying monthly you are taking out a credit agreement that includes interest making your annual premium more expensive.
3. Add a named driver: Depending on the added driver’s driving experience and history, adding a named driver could save you money on your premiums. However, it’s crucial to be honest about who will primarily drive the vehicle. Dishonestly designating the main driver to obtain cheaper insurance, known as ‘fronting’, is illegal and constitutes insurance fraud.
4. Don’t modify your car: Modifying your vehicle might invalidate your current coverage if these modifications aren’t covered by your current insurer. They can also increase future insurance costs. Before making any changes, be sure to contact your insurer and assess whether the price is worth the modifications.
5. Avoid unnecessary extras:  While optional add ons can be beneficial for some, they may not suit everyone. Assess which add ons you may not need to help lower your premium.
6. Occupation:  Inform your insurer if you’ve transitioned to a remote or hybrid role. Reduced driving in these roles can lower your premiums. Always be honest about your occupation, failing to do so is insurance fraud and you may not be covered for any accident you’re involved in.

Renewing your policy:

Here at GoSkippy we offer different levels of car cover which come at different prices, this means that you only pay for the cover you need. These include:

• GoSkippy Essentials – Our basic fully comprehensive 3* Defaqto rated product. This is a stripped back level of car insurance which gets you on the road.
• GoSkippy Standard – Our fully comprehensive, 5* Defaqto rated product which includes benefit like Windscreen cover, Uninsured Driver Promise, Personal Belongings cover, and much more.
• GoSkippy EV Cover – Powered by Zoom. Our specialist 5* Defaqto rated EV product which includes all the benefits of our standard product, plus things like Battery cover, and Public Charging discounts.
• GoSkippy Roadside – Our 5* Defaqto rated standard product, with an additional benefit of RAC Breakdown cover.
• GoSkippy Premier – Our 5* Defaqto rated standard product, with the additional benefit of cover for Legal expenses as well as RAC Breakdown cover.

So if you’re looking to reduce your premium at renewal, look at the cover you need and consider what level is best for your needs.

While our essentials cover may seem like the cheapest option, our other tiers may offer you more cover for not much more money. This can potentially save you money in the long run.

You can find out more on our available products here.

Please check the policy wording before renewing with a new product to ensure you’re fully aware of the limits of the product you’re purchasing.

Looking for Car Insurance?

Get a quote today with GoSkippy