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Why has my car insurance gone up?

| Insurance

Everyone has to pay for car insurance if they wish to drive their vehicle on public roads, and be covered in the case of an accident. However, the cost of your insurance will likely differ from the price a spouse, friend or neighbour pays. This is because providers use many rating factors to provide you with a price that’s appropriate to your specific circumstances. These rating factors determine how risky or safe you are to insure.

When you take out insurance of any kind, you’ll be asked many questions. For car insurance, you may be asked your occupation, what vehicle you have, your age, where you live, who else will be driving the vehicle, how long you’ve had your licence, what you’ll be using the vehicle for, etc.

This information is essential for providers so that they can give you a quote that reflects how likely you are to have an accident or claim on your insurance. For instance, in the eyes of an insurance company, if you’ve had two car accidents in the last two years, your chances of having another are increased compared to someone who hasn’t had an incident in over five years. The more likely you are to have a car accident, the higher your insurance premium. In contrast, it can also come down if you are deemed less of a risk. It’s important to provide correct and factual information when getting insurance, otherwise your insurance policy could be void. 

Why has my insurance premium increased?

As stated above, the insurance premium for each individual person is calculated based on risk. When any one of these risks changes, you may see a difference in your premium. So what could make you seem more of a ‘risky’ driver to an insurance provider?

Increased mileage

If you’ve increased the amount of mileage you’re doing and have notified your insurer of this, you will likely see an increase in the amount you pay for insurance. The more you’re on the roads, the higher your chance of having an accident. For example, if your driving increases from 4,000 miles per year to 12,000, the odds of having an accident goes up.

Vehicle value

Your insurance premium will depend on the value of your vehicle - typically, a Ferrari, for example, would be much more expensive to insure than a Ford. This is because a more expensive vehicle will cost more to repair.

Your insurance premium will depend on the value of your vehicle - typically, a Ferrari, for example, would be much more expensive to insure than a Ford. This is because a more expensive vehicle will cost more to repair.

To find the correct price for your vehicle, you could use online car guides.

A job change

Ever wondered why an insurance provider asks for your job title? It’s because some jobs are deemed riskier than others, which may have an impact on your insurance. If you’ve recently changed jobs and notified your provider, this could have an impact.

You’ve had an accident

Your car insurance will almost certainly go up if you have an accident and make a claim, which is something we cover further down in this article.

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Should car insurance increase every year?

Car insurance generally tends to be more expensive for younger and older drivers. As you get over the age of 25, your car insurance will generally go down each year or stay the same. However, as you approach 70, you may find that your car insurance starts to increase every year.

There are around 50 insurance groups for each vehicle and yours will fall into one of these. These categories are generally based on the price of your vehicle, its engine size and its age. Every 12 months, your car becomes one year older, which may alter the category it falls into and could, therefore, raise your premium. Older cars are more likely to experience issues or problems than newer models. This is why it’s important when renewing your insurance to fill in all the information as accurately as possible.

Does filing a claim raise your car insurance?

Generally, your insurance premium will increase after a claim because your claim has cost the provider money.

When it comes to your car insurance, making a claim will get rid of your no claims discount (NCD), unless you have NCD protection. The longer you go without claiming on your insurance, the bigger the discount you will receive from the provider. By claiming on your insurance, your NCD will be cleared, potentially causing your insurance premium to increase. However, you shouldn’t avoid this by not declaring an accident to your insurance company. 

How much do car insurance premiums increase after a claim?

Every car accident is different and so it can be hard to give a precise figure demonstrating how much your insurance could increase by. However, Which? have gathered some data that could give you an idea. 

If the incident involved a collision with another car and it was your fault, you could pay an additional £610 over three years, increasing your insurance by around £200 per year. If it wasn’t your fault, you could pay around £158 over three years*.

*Data correct as of 2017. Source: Which?

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