They’ve sparked plenty of debate, but 20mph speed limits seem to be having a surprising upside – they’re making car insurance cheaper.
A leading price comparison site recently reported the biggest drop in UK car insurance prices in over a decade. On average, premiums have fallen by £161 (16%) in the past year.
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This comes as a relief after a rough couple of years where many drivers faced record-breaking premium hikes, with some even seeing their costs double. But while prices are falling, car insurance still isn’t cheap. On average, premiums are 33% higher than they were two years ago, before the huge increases in 2023.
According to Confused.com, the average comprehensive car insurance policy now costs £834 – down from £995 last year and the lowest price in 18 months. The drop has been credited to several factors, including increased competition among insurers and better safety features in cars. But 20mph zones in cities and towns are playing a key role, too.
Steve Dukes, CEO of Confused.com, explained: “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.
He added: “Though many drivers find these reduced speed zones frustrating, it’s positive to see the bright spot this is creating for drivers’ costs.”
Over the past few years, 20mph limits have been introduced across parts of the UK, sparking controversy in some areas. Wales made 20mph the default speed limit for built-up areas in September 2023, though backlash has led to plans for some roads to return to 30mph. Meanwhile, London now has nearly 165 miles of 20mph roads, with Manchester and other cities set to follow.
The link between 20mph zones and cheaper insurance isn’t new. Back in June 2023, insurer esure revealed that damage claims in Wales dropped by 20% after the speed limit change, estimating that drivers could save up to £50 annually on premiums if these zones rolled out across the UK.
But not everyone is seeing these savings automatically. Confused.com found that over half of drivers who received renewal quotes in late 2024 reported an average increase of £78 in their premiums. It’s those who shop around for new deals who are getting the biggest savings.
Younger drivers, in particular, are reaping the benefits of falling premiums, with insurers offering more significant discounts to this group.
Better yet, the downward trend might continue. According to pricing consultancy Pearson Ham, “We expect further declines in 2025, with competition likely to push premiums even lower.”
So, while 20mph zones might be frustrating for some, they’re helping to bring relief to wallets – and could save drivers even more in the years to come.
