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Calculating your car insurance

Your premium explained
Find out how we calculate the cost of insurance

A car in the centre of circle with other circles including a speed camera, a raincloud, car parts and a gavel

How your details affect your price

Your age and driving experience

Our experience shows that younger drivers are more likely to be involved in accidents and make claims than any other age group. The older and more experienced you are as a driver, the less likely you are to claim (until you get into your late 60s / early 70s when the risk starts increasing again). This is reflected in our pricing.

Young female with learner driver badge and older male with a driving award

A small blue hatchback car and bright orange 4x4

Your car

As you'd expect, the type of car you drive has an effect on the cost of your premium. A large, powerful car tends to be more expensive to insure as the cost to repair it will be greater. Whereas a car designed to get you from A to B, with built in safety features like autonomous emergency braking (AEB), could benefit from better prices, as market studies have shown that they are less likely to be involved in an accident.


Where you live

Your neighbourhood has a bearing on the cost of your car insurance. Normally, in areas where the risk of accidents is greater (typically more urban and population dense areas), you’ll pay more. The same applies if you live somewhere which has high levels of vehicle crime.

A red house in the countryside and a red house in a busy city

A blue car travelling to work at night and a blue car travelling to work in busy morning traffic

When and how far you drive your car

If you use your car for business purposes, you're likely to pay more for cover, as you’ll be driving more when the roads are busy. Your annual mileage is also an important consideration. After all, the more you drive, the more likely you are to be involved in an accident.


No claim discount

If you don't make a claim on your insurance, it's seen as a sign that you’re a safer driver and so you’re often rewarded with a No Claim Discount (NCD) each year. The more NCD you have, the better your price.

A red car with a green door patched together with 0 years no claim and a new blue car with 5 years no claim

A blue hatchback crashed into a postbox and a orange car in water with a duck

Your claims and convictions

Our experience shows that drivers who have made a number of claims in the past - or have had motoring convictions, like a speeding fine - are more likely to make a claim. This additional risk is normally reflected in a higher premium price.

How outside influences affect your price

Changes in legislation

Constitutional or regulatory changes can have an effect on the price of your car insurance premium. Take the changes to the personal injury discount rate - or Ogden discount rate - announced in February 2017. The legislation means insurers will have to pay out bigger lump sums for personal injury claims. This will mean an increase in annual premiums.

Changes in taxation imposed by the government can also affect your price: Insurance Premium Tax (IPT) is a tax on general insurance premiums and has increased incrementally since it was introduced.

A female and male on a set of scales, the female is lighter and a another showing the female and male balancing on the scales

Car parts, including some fluffy dice and a mechanic fixing an orange car

The rising costs of parts and labour

Just like everything else, the cost of car parts and employing skilled mechanics to repair damaged cars is going up too. Naturally, this has a knock on effect on the price of your insurance premium.


The increasing cost of claims

Millions of claims on car insurance policies are made every year.

As cars become more and more sophisticated, the costs of parts, labour and the expertise needed to repair them goes up. But the cost of a personal injury claim is even more expensive than 'bent metal'.

Making sure someone injured in a car accident receives enough money to support them during their recovery is important. As most insurers pay out the majority of the premiums you pay in claims, prices have to go up to cover these costs.

A snow storm causing three car to a standstill and three injured people sat in a doctor's office


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