To work out your price, we weigh up lots of different factors. Some of these are specific to you, while others come down to changes in the insurance industry and the wider world.
Everyone who buys insurance pays into a central pot and, if you make a claim, that's the pot we pay you from. If the numbers and costs of claims increase, the pot needs to go further, which means prices can go up.
On this page, we’ve explained some of the factors which can affect your price.
Before your current policy ends, we’ll send you a renewal invite. It’ll show 2 prices – last year’s price and a price for continuing your cover the following year.
As you’re already a customer with us, your renewal price will be the same as or lower than the equivalent price for a new customer.
If your price from last year is different from the price you actually paid, it’s likely because you’ve made a change to your cover in the last 12 months.
Your renewal invite will show how much your current cover would have cost over the whole of last year if that change had been in place from day one. This gives a better comparison between last year’s premium and your new premium.
Prices don’t always change because of something you have done. For example, the total cost of all claims made during the year, more expensive repair costs or severe weather could have made your price go up. There are also external factors that might mean your insurance costs more or less including inflation and recent change to regulations.
Regulations introduced in 2021 mean we have had to change to way we calculate our prices. As a result, we ensure that your renewal price will never exceed the equivalent price for a new customer. This doesn’t necessarily mean your renewal price will be lower than last year’s price, as other factors could also impact your price, such as those mentioned on this page.
The price does include your no claim discount, and the more years’ you’ve collected, the bigger the discount will be. However, the first few years make the biggest difference to your price — after five years the impact levels off.
Note that you can pay to protect your no claim discount, letting you keep some or all of the discount even if you make a claim.
When working out your price, we look at the neighbourhood you live in, considering factors such as the amount of traffic, crime, and accidents in the area. As these increase, the number of claims tends to increase as well, which can make insurance more expensive in some places than others.
Your age can have an impact on your price. For example, young people are on average more likely to have accidents, so their insurance tends to cost more.
The kind of car you drive could influence your price as well. Before giving you a quote, we consider the car’s age, make, and engine size, among other factors.
To help decide your price, we look at your claims history, including any claims or accidents you’ve had in the last 5 years.
When calculating your price, we consider your driving convictions. Our experience shows that people with these convictions are more likely to claim, meaning they cost more to insure.
Bad weather such as rain and ice can lead to higher prices by increasing the number of accidents and claims.
It’s getting more expensive to buy car parts and pay for repairs, which raises the cost of insurance.
Some claims cost more to cover than others, and if the number of these claims increases, prices are likely to increase as well. For example, the number of personal injury claims has risen in the last 10 years, driving up the cost of car insurance for everyone.
New laws or regulations sometimes affect the price we charge. In 2021, for example, the government phased out commission for lawyers working on minor-injury claims. This lowered our costs, and we passed 100% of the savings on to customers.
A higher number of claims can lead to an increase in our costs and to higher prices overall.
In 2017, the Government raised Insurance Premium Tax (IPT) from 10% to 12%, forcing prices up across the market.
Your price will also include the costs of customer services, such as our claims team and online support, as well as investment in future products and services.