Owning a car in Melilla comes with a hefty price tag. The average annual car insurance premium in the city has climbed to 772 euros, up to 400 euros more than drivers pay elsewhere in Spain. For many residents, it is a monthly expense that keeps growing.
Insurers say Melilla’s unusually high rate of accidents and claims is the basic reason for the steep premiums. Information from AXA Oficina Seguros Sociedad Melillense Arias, local agencies handle more claims than most, many involving vandalism or fraud. The agency says it leads the local auto insurance market, yet prices are much higher than on the mainland. Cars are sometimes set on fire for insurance payouts, but settlements rarely cover their full value, often leaving owners at a loss.
MAPFRE reports that Melilla and Ceuta have Spain’s lowest overall insurance spending per capita, at 822 euros per person, compared with 2,214 euros in Madrid. Yet Melilla stands out for its high car insurance costs. In 2025, third-party insurance averaged 350 euros in Almería, while all-risk cover with a deductible cost 437 euros in Sevilla. Melilla’s average policy cost is higher than both, despite the city having the country’s lowest GDP per capita, at 20,479 euros. Drivers in Ceuta paid an average of 618 euros. With slightly higher incomes, the burden there is still heavy.
Local agencies have tried to ease the strain with targeted discounts and campaigns, but some types of coverage are hard to avoid. Home insurance, for example, is often necessary: a single water or electrical problem can quickly become expensive if it affects neighboring apartments. The AXA office says a home incident can cost several times more than a car accident. When a car sustains serious damage, it is often declared a total loss, and insurers pay out only if the numbers make sense. Young drivers face the steepest premiums, sometimes ten times those paid by experienced motorists, and insurers still struggle to make these policies profitable. A single major accident can wipe out years of premiums.
Long-established agencies in Melilla still insure young drivers, often the children of loyal clients, but impose strict terms and limit coverage, especially for health-related claims. Their advice is clear: study the policy details, pay attention to what is covered, and insure valuable items at home. Many locals have learned that paying a little more upfront can prevent much larger losses later. INE data also place Melilla among Spain’s lowest in per capita income, adding to the financial strain of high insurance premiums for local drivers.
Across Spain, the insurance sector is growing. Mapfre Economics reports a 13.8% rise in total premiums in 2025, mostly from life insurance. Still, Spain lags behind much of Europe in insurance coverage, especially for life policies. The Protection Gap, the shortfall between ideal and actual coverage, has grown to 45.9 billion euros. Many Spaniards remain cautious about insurance, but agencies warn that “cheap can prove costly”: cutting corners on coverage can lead to bigger bills when something goes wrong.
Rising costs and stagnant wages have made car ownership harder across Spain, as reported earlier. In Melilla, high premiums combined with low incomes make the situation especially tough for drivers.
Melilla’s insurance problem reflects local realities: frequent claims linked to intentional damage amid a difficult economic climate. Insurers are responding to a risk profile that differs from the rest of Spain. The figures show the burden: drivers in Melilla pay more to stay on the road.
