The motor insurance industry has enjoyed a bumper year of profits off the back of pandemic lockdowns leading to less incidents and subsequently fewer claims - so why have premiums risen in the last month?

As the UK enters its third full lockdown in the space of a year, many drivers will be staying off the roads, but analysis from MoneySuperMarket has found in the last quarter of 2020, premiums rose from £473 to £490. As expected the cost of an insurance policy dropped year-on-year, but there is no clear explanation as to why the late surge in prices through October to December.

Drivers in London were hit the hardest, as ever owning a car in the capital is an expensive hobby, with the average premium in East London topping out at £955. Compare that to Kirkwall where the average cost is just £269, a massive differential.

Top 10 most expensive locations for car insurance premiums:

Position	Location	Q4 2020 cost
1	East London	£955
2	Ilford and Barking	£877
3	North West London	£872
4	Southall and Uxbridge	£833
5	North London	£832
6	Bradford	£776
7	Manchester	£765
8	South East London	£755
9	Birmingham	£753
10	Oldham	£748

The ten cheapest locations for car insurance premiums

Position	Location	Q4 2020 Cost
1	Kirkwall	£269
2	Dorchester	£277
3	Exeter	£278
4	Truro	£283
5	Dumfries and Galloway	£284
6	Llandrindod Wells	£292
7	Torquay	£298
8	Shrewsbury	£300
9	Taunton	£300
10	Inverness	£305

Kate Devine, car insurance spokesperson for MoneySuperMarket, commented: "With new lockdown measures now in place following the Prime Minister’s announcement on Monday, a major fall in traffic could lead to lower prices – at least in the very short term."

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