What drives the price of car insurance?

There are some well reported increases being seen across Car Insurance premiums in the UK at present, below we look into what drives the price of car insurance. 

Several factors contribute to the pricing of car insurance in the UK:

  1. Risk Assessment: Insurers evaluate risk factors such as age, driving history, and location. Younger or inexperienced drivers, those with past accidents, and residents in high-crime or high-traffic areas may face higher premiums due to perceived higher risk.

  2. Claims History: The frequency and severity of claims made by drivers can impact insurance costs. Areas with more claims may experience increased premiums.

  3. Vehicle Type: The cost and risk associated with repairing or replacing a vehicle influence insurance prices. High-value cars or those with expensive parts may lead to higher premiums.

  4. Usage Patterns: How often and for what purposes the vehicle is used (commuting, business, pleasure) affect insurance rates. More time on the road means higher exposure to potential accidents.

  5. Personal Factors: Personal details like occupation, marital status, and credit history can influence insurance rates. Some insurers consider these factors in assessing risk.

  6. Government Policies: Changes in government regulations or policies, such as adjustments in insurance tax (Insurance Premium Tax – IPT), can impact overall insurance costs.

  7. Fraud and Claims Costs: The prevalence of fraudulent claims and the associated costs of settling claims can affect insurance prices for all policyholders.

  8. Technological Advances: Advances in vehicle security and safety features might reduce the risk of theft or accidents, potentially affecting insurance prices.

  9. Natural Disasters and Climate Change: The increasing occurrence of extreme weather events can lead to higher claims and subsequent insurance costs.

  10. Market Competition: Intense competition among insurance providers can lead to fluctuations in premiums as companies strive to attract customers with competitive rates.

Understanding these factors can help individuals make informed decisions when purchasing car insurance and explore options that best suit their needs and circumstances.

Our advice: unfortunately, there is no quick fix for this factor. The best advice for young drivers is to be safe and considerate on the roads and build up your no-claims bonus. This will bring your premium down in the future. In the meantime, you could take an additional driving course such as a Pass Plus Course or Advanced Driving qualification. While this may lower you premium, there is no guarantee.

Purchasing your car insurance through a broker means that you will receive a more personal and comprehensive service. A common pitfall of obtaining quotes online is that crucial information is often overlooked or undisclosed. Our team understand how vital these details are in the event of a claim – that’s why we carry out full license checks for all our clients, ensuring all claims and convictions are notified so that any future claims will be paid on time. One of our experts will also discuss contributing factors such as your average mileage per week in order to provide you with suitable cover.

Brunel Insurance for People can provide low excesses and top legal expenses policies for its clients, meaning whether their accident is a fault or a non-fault, they will receive a courtesy car. If a claim does occur, our in-house claims team manage the process of agreeing and setting the claim. We are aware that a serious claim can have an adverse effect on business, that’s why our team will dedicate time and effort to work towards a swift and successful outcome.

Brunel is an independent, specialist broker. We approach the entire open market, then use our excellent market relationships to whittle down the cost of your premium, arranging the most suitable cover at a competitive price. For a free, no-obligation quotation, call us on 01934 643400.