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Why has my car insurance gone up?

Car insurance can sometimes feel like something we don’t have any control of – your premium is worked out based on hundreds of different factors, and often, we simply choose the best policy from a range of quotes we’re comparing.

Since it’s often hard to say exactly why we’ve been offered a certain price in the first place – it can feel unfair and unjustified if your renewal price goes up again, especially if you haven’t had any accidents and claims in the last year.

Since our insurance team talk to so many customers each day, we’re perfectly positioned to answer some of the most common questions about increasing insurance prices, including:

  • Why is my car insurance so high?
  • Why has my car insurance gone up for no reason?
  • Will I get the best price if I auto-renew my car insurance?

If you want some inside knowledge on car insurance prices – along with a few tips on how to make sure you’re not paying a penny more than you have to – you’re in the right place.

Why is my car insurance so high?

When it comes to car insurance, you can generally group the reasons for high prices into two boxes – there are the things you can control, and the things you can’t. For now, we’ll focus on the things you can’t control – but we’ll come onto a list of things that you can do to drop your insurance costs soon.

Statistics make the car insurance world go round – and if you’re on the wrong side of those statistics, you’re likely to find that your premiums are higher than average. These are often things you can’t easily control – such as:

  • Your age
  • Your postcode (assuming you don’t want to move house just to reduce your insurance costs)
  • Accident and theft rates locally
  • Past accidents and convictions 

Car insurance providers get their prices based on how likely they are to have to payout at some point during your policy. Clearly, they don’t have a crystal ball that lets them look into the future – so the facts we’ve listed here give the company a good indication of how likely you are to be involved in an accident.

It might seem like a ‘guilty until proven innocent’ approach to insurance – but unfortunately, that’s the way insurance works. This means that premiums can be especially high for people who are young, people who have previous driving convictions, and people who live in areas that see a lot of accidents and car thefts.

Since these things are difficult or impossible to control, it’s worth noting that all insurance companies are slightly different – and they all tend to assess risk using different criteria. As such, it’s not a bad idea to ask them directly why your premium is so high. You might not be able to control the answer – but it will give you an idea if you’d be better seeking your insurance elsewhere, perhaps through a specialist provider.

Why is my car insurance going up every year?

So, now we’ve got an idea of why car insurance can be high – you might be especially confused, since providers often put their prices up even if you don’t feel like you’ve done anything to deserve an increased premium.
The truth is, you could have a year or completely incident-free motoring – but still be asked to pay more next year. 

The reason? 

It’s often got a lot to do with customer behaviour. In 2018 alone, it’s estimated that 4.2 million UK drivers just accepted the automatic renewal price that was sent to them by their insurer. The result? A combined figure of nearly £600 million in missed savings – and all it would have taken was some quick comparisons.

Insurance companies know that huge numbers of people will just continue to pay the price they ask – and with that in mind, they will often happily charge you more if you don’t challenge it.

There are other reasons as well that can cause insurance premiums to rise such as economic uncertainty along with changes in the exchange rate or labour market. As most car parts are imported then any economic factors here can cause fluctuations. Also, the number of claims and their totals in the broader market can have a knock-on effect on individuals policies. Insurers may also have to pay Insurance Premium Tax which over the years has increased from 2.5% to 12%.

What can you do to get the best price possible?

Your personal circumstances will dictate your insurance costs to a large degree – but even if you tick one or more of the ‘high risk’ boxes that insurance companies charge more for, it doesn’t mean you have to settle for anything less than a great deal. 

Here are a few tips that’ll make sure you pay no more than is necessary for your insurance:

Shop around

Since insurance companies are hoping you’ll blindly renew with them – shopping around gives you some great alternatives – as well as giving you a good idea of what’s available if you want to go back to your provider and ask them to match a price.

Look for specialists

If you feel like there’s a reason your insurance is going up – look for a specialist provider who works with people in your position. Perhaps you’re a little older? Maybe you’re young? Do you have previous convictions? Have you got a high-performance car? It doesn’t matter – there’s a provider out there who’ll find you an unbeatable price.

Choose your car carefully

Generally, higher performance vehicles attract higher premiums. If you’re really keen to keep your insurance costs down, consider a car with a more modest engine size and slightly gentler performance.

Fit some security

If it seems the area you live in or the car you drive is pushing premiums up – you might want to consider fitting some specialist security – like a tracker or immobiliser. Insurance companies will be able to tell you the kinds of devices they recognise – and it could save you a hefty sum each year.

Opt for a blackbox

If you don’t think it’s fair that insurers consider your particular demographic to be one that’s likely to have an accident – prove them wrong! A black box telematics policy will allow your insurer to monitor how, where, and when you drive – and it’ll reward you with lower premiums if you’re sensible.

Limit your miles

The more time you spend on the road, the greater the chance you’ll have an accident. As such, hopping on the bus or train is a great way to avoid driving your car any more than necessary. When you do, you can bring down the number of miles your insurer is expecting you to do each year – and your premium should come down a little too.

Other related FAQs

Looking for more related content to this? We’ve picked a selection of related topics that you may find helpful

If you make a claim on your car insurance, then yes, the cost of renewing your insurance will go up, unless some other significant factor works in your favour to bring it down.

Car insurance is usually calculated based on the likelihood of you making a claim in the future. A range of factors are taken into consideration too, such as age, occupation, your driving history and the details of your vehicle.

Put simply, the reason why car insurance is high is because the cost of claims is high. As a result, insurers increase premiums to protect themselves and make a profit.

Unfortunately, it’s impossible to accurately calculate how much your car insurance is going to cost without getting a range of quotes. As well as looking at national driving statistics, insurers will seek a huge amount of information about you and your vehicle before deciding on a personalised price.

A no claims bonus is a discount that’s applied after your insurance premium is calculated by a car insurance provider. The discount doesn’t stop your premium from going up; instead, it simply gives you a percentage off your premium – and that discount grows with every claim-free motoring year you have.

Unfortunately, making any kind of insurance claim will often increase your renewal premium – even if the accident wasn’t your fault.

In the UK, every car is allocated an insurance group. This helps insurance companies determine the cost of cover. The groups run from 1, which offers the cheapest premiums, to 50, which offers the highest. The cheapest car insurance group is therefore group 1.

Backdating car insurance cannot be done under any circumstances. Since it is a criminal offence to do so, you will not find any broker or insurance company who will be able to do this for you.

Insurers generally do not offer the facility to put your car insurance on hold – and cancelling and restarting your car insurance cover rarely makes financial sense. If you’ve got a reason for needing a break in cover, talk to a specialist company who cater for your circumstances – like classic car insurers or student policy providers.

If you’ve had an accident of any kind, you’ll need to report it to your insurer soon afterwards. When you do, they’ll seek a detailed explanation of what’s happened and assess the damage done to your car. When they have a clear understanding of what’s occurred – and assuming you have fully comprehensive cover, they’ll arrange to repair your vehicle – or pay its market value if it’s written off.