Car and motorcycle insurance in Melilla now costs up to 400 euros more per year than in most of Spain. High accident rates and intentional damage drive up premiums, leaving local drivers with the steepest bills in the country.
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 what drivers pay elsewhere in Spain. For many residents, this isn’t just a number on paper; it’s a monthly expense that keeps growing.
Insurers say the main reason for these high premiums is Melilla’s unusually high rate of accidents and claims. According to AXA Oficina Seguros Sociedad Melillense Arias, local agencies handle more claims than most, with many tied to vandalism or fraud. The agency notes that while they lead the local auto insurance market, prices are much higher than on the mainland. Cases of cars being set on fire for insurance payouts do happen, but the reality is less rewarding—settlements rarely cover the car’s full value, often leaving owners at a loss.
MAPFRE reports that Melilla and Ceuta have the lowest overall insurance spending per capita in Spain—822 euros per person, far below the national average.
Melilla and Ceuta have the lowest per capita insurance spending in Spain—822 euros per person, compared to 2,214 euros in Madrid. But when it comes to car insurance, Melilla stands out for the wrong reasons. In 2025, third-party insurance in Almería averaged 350 euros, and all-risk with deductible in Sevilla was 437 euros. Melilla’s average policy cost is higher than both, despite having the country’s lowest GDP per capita at 20,479 euros. Ceuta’s drivers paid 618 euros on average, but with slightly higher incomes, the burden 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, since a single water or electrical problem can quickly become expensive if it affects neighboring apartments. As the AXA office points out, a home incident can cost several times more than a car accident. For cars, serious damage often means the vehicle is declared a total loss, and insurers only pay out if the numbers work. Young drivers face the steepest premiums—sometimes ten times higher than those for experienced motorists—and even then, insurers 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 with strict terms and limited coverage, especially for health-related claims. Their advice is clear: read the policy details, know what’s covered, and don’t skimp on insuring valuable items at home. Many locals have learned that paying a bit more upfront can save much larger losses later.
According to official data from INE, Melilla has one of the lowest per capita income levels in Spain, which, combined with high insurance premiums, places a significant financial strain on local drivers. This gap between income and insurance costs is particularly acute in Melilla compared to other regions.
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 as agencies warn, "lo barato sale caro": 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, though, the combination of high premiums and low incomes makes the situation especially tough for drivers.
Melilla’s insurance problem comes down to local realities: frequent claims, intentional damage, and a difficult economic climate. Insurers aren’t simply raising prices—they’re responding to a risk profile that’s different from the rest of Spain. Unless these underlying issues change, drivers in Melilla will keep paying more just to stay on the road.
