Your car insurance renewal explained

If you're an existing LV= Car or Home customer, you can be sure you'll always pay the same or less than one of our new customers when you renew.

Your quote will be compared to a new customer price on the same day your renewal was generated, based on the exact same cover.

Why do car insurance prices change?

A rise in the cost to resolve claims has a direct impact on people’s insurance prices. Cars are costing more to repair or replace and premiums have had to go up as a result. Our average claim cost is now 22% higher than in 2022.

Icon of a car with a hand underneath it

What if I haven’t made a claim?

When we calculate a price for a policy, we have to factor in what our overall claims cost will be to make sure there’s enough money in the pot for everyone’s claim.

Just like other businesses, the increased cost of things affects us and it can also affect our pricing. That’s why, even if you haven't made a claim, your premium could go up.

Did you know? Motor insurers paid out a record £11.7 billion in car insurance claims in 2024, as increases in theft and repair costs continued to impact premiums, according to the latest data from the Association of British Insurers. (Source: ABI)

We continue to assess the value of our cover, and an increase in premiums is not something we take lightly. It’s really important to us that we continue to put you first and give you the same great service you’ve come to expect.

What are some reasons for rising car insurance costs?

The cost of repairs: vehicles with sensors, cameras and high voltage systems are raising the cost of replacement parts and require specialist labour.
Energy costs: some garages faced a 300% rise in their energy costs during 2023. (Source: ABI)
Record high vehicle theft and cost of average theft claim: The average claim for theft of and from a vehicle hit £11.2k in Q4 2024.(Source: ABI)
Courtesy cars: the cost of courtesy cars - an important part of our service - jumped 35% in 2022, representing another annual record increase. (Source: ABI)

How do car repair costs affect my renewal price?

If car parts or repairs get more expensive, so can car insurance. Our infographic shows how much certain repairs cost in 2020 compared to 2024.

Take something as seemingly simple as a new headlamp. In 2020 it would have cost around £500 to fix on average. Headlamps aren’t cheap, and by 2024 that average repair cost had gone up nearly £240.

Repair costs 2020 vs 2024.

How can I reduce the cost?

We pay out on over 99% of motor claims.
99.58% of direct motor claims paid Feb 2024 - Jan 2025

What are we doing to keep costs down?

We know it’s hard to keep up with the cost of living at the moment and these challenges affect everyone

Icon of a green car next to a bigger white car

At LV= we’re doing everything we can to tackle these challenges...

Maintaining quality while driving down repair costs: We’re increasing the number of our body shops and garages, exclusively for LV= customers. With pre-agreed prices for repairs and quicker decision making, we ensure the highest standards while controlling costs.
Expanding our team to get you back on the road: Engineers and specialist engineers for Electric Vehicles are in short supply and many are retiring. We're investing in apprenticeships to grow our engineering team, so we can be there when you need us most.
Tackling repair delays so you get what you need: We’re working with our suppliers to combat the issue affecting everyone caused by a global shortage of important materials and high-tech car parts, like semi-conductor chips.

Take a look at our LV= car insurance customer reviews

Thanks to all our customers who have rated us ‘Excellent’ on Trustpilot!

What can car insurance claims pay for?

Here's a video created by the Association of British insurers to help you understand what your premium pays for.

Please check your individual cover as policies can differ.

Transcript

Mum, I heard them say that Dad needs help to walk again.

That's right, honey. But don't worry, before you know it he'll be home. And we have all kinds of other help on the way. That's what we have insurance for.

But I thought insurance was just for the car, though

Yes, it will pay for our car to be replaced, but it will also pay for all of your dad's treatment, like physiotherapy. Our insurance will pay for us to have a special car until he gets better. It will take care of the money your dad usually makes whilst he can't work. And we'll have a carer for him so I can keep working.

Woah. So it will cost more than this?

Yes, it will buy a lot of those. You see insurance is like a pot that everyone puts money into. Then when someone has an accident, they take money out.

So it's like all our neighbors are helping us.

That's a lovely way to think about it. We actually have insurance for all kinds of things, like for our home, when we travel, and there's even life insurance. Fancy a game?

Yeah!

Erm, Mum I think your neighbors might need the pot of money.

So, why renew with LV=?

We're proud to be recognised as a Which? Recommended provider for car insurance for 11 years running and how our award-winning customer service sets us apart.

Our friendly call centres are here to help and our Defaqto 5 Star rated insurance reflects the outstanding quality of our cover. You can be confident we offer the highest level of protection for all events.

Renew now

Got a question? We might have answered it here...

How do I know my renewal price is the same or cheaper than a new customer?

Could I get a cheaper price at renewal?

Getting a cheaper quote could be due to a variety of things. Usually, it’s because the cover level or optional extras you’ve selected are slightly different. When we work out your renewal, we use all the same details you gave us when you set up your policy (plus any changes you’ve told us about). If you do get a cheaper new quote with us for the exact same cover you currently have, then please call us and we’ll amend your renewal quote.

From time to time, your renewal price may be cheaper than the price we’d give you as a new customer to reflect our view of changing risk. The regulation states that your renewal price must be the same or cheaper than the equivalent new price.

At renewal we’ll update your details to reflect the changes we know of, such as your car and its drivers being another year older. We’ll then calculate your price using these details.

Details include:

Amount of cover:
This includes your excess amount and any additional extras you’ve bought (such as breakdown cover, or legal expenses). When you get a quote on a price comparison website, these details aren’t always included – this is one of the reasons a new quote can appear cheaper than your renewal.
Timings:
Insurance prices can change frequently. This means that between your renewal price being calculated (30 days before your renewal date) and your renewal date itself, there may be changes to our prices. This could be due to inflation, the cost of claims, or a change to our view of the risk being insured. If prices go up after you’ve received your renewal quote, we’ll always honour your renewal price - as long as you renew before the expiry date.
Personal details:
We’ll calculate your renewal based on the information we already know about you, this includes the names, address, vehicle or home on your policy. If any of your details have changed or if we ask for additional information for a new quote that we didn't ask you when you took out your policy, this could result in a different price on the price comparison sites.
How you set up your policy:
We’ll take into account how you first bought your policy and how you set up your policy. So, depending on whether you bought your policy online or through our call centre, your price may be different.

I’ve had a renewal price, why have I been declined a new quote?

What legislation and regulations are in place?

From 1 January 2022, all insurers are adhering to a new pricing regulation set out by the Financial Conduct Authority (FCA). All insurers will make sure that existing customers never pay more than a new Car or Home customer for a like for like policy.

There's also the personal injury discount rate - or Ogden discount rate - which was changed in February 2017. This legislation means insurers now have to pay out bigger lump sums for personal injury claims. This has meant 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.

We look after over 4.5 million people like you in the UK so you're in good company

Our customers have rated us as '4.5 Stars - Excellent' on Trustpilot

defaqto

Given the prestigious Defaqto 5 Star rating for our car insurance

Which?

Which? Recommend Provider for car insurance