Your car insurance questions answered

With so many factors at play in the calculation of our premiums, it’s no wonder that most of us have more than a few unanswered questions. So, who better to consult for advice than the car insurance experts at Compare the Market?

With so many factors at play in the calculation of our premiums, it’s no wonder that most of us have more than a few unanswered questions. So, who better to consult for advice than the car insurance experts at Compare the Market?

Daniel Hutson
Motor insurance expert
minute read
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Posted 27 JANUARY 2020

1. What are car insurance prices based on?

Each policy is calculated using a series of ‘building blocks’ relating to the individual, including where they live and the car they drive.

The biggest single discount you can get on car insurance tends to be the no claims discount. The more years you drive without making a claim, the greater the discount on your premium could be.

2. What’s the cheapest car insurance for young drivers?

Drivers aged 17-24 are often hit with higher premiums, partly because statistics show they’re more likely to be involved in an accident. In fact, out of 100,000 accident alerts since 2010, 70 per cent involved drivers aged between 17 and 21.

There’s no universal policy that’s considered to be the cheapest car insurance for young drivers, but there are products aimed at that market. One option may be telematics insurance, where you download an app to your phone or a black box is fitted in your car to monitor how, when and where you drive.

This gives you the opportunity to prove you’re a good driver. Most insurance providers tend to think that within a three-week period they can recognise a driver’s idiosyncrasies and may look at offering discounts.

3. Why does occupation affect car insurance?

Your occupation affects your car insurance premium because if you drive your car for work purposes, there could be an increased risk of you making a claim.

An insurance provider decides which occupations are most likely to be a risk. As an extreme example, they might well decide that a rally driver is a higher risk than a retiree.

4. Why does my car insurance keep increasing?

There could be numerous reasons for this, which is why it’s so crucial to shop around. All insurance providers review their policies on an annual basis. If you had a great deal in year one, you could see an increase when it comes to renewal.

Market forces can also have an impact, as can an individual’s actions, such as incurring points on your licence, being involved in an accident or making a claim.

Don’t just accept an increase in your insurance premium. Always check if there’s a cheaper deal available elsewhere by comparing car insurance quotes from a number of different insurance providers.

5. Why does my credit score affect my car insurance?

The past few years have seen insurance providers increasingly making a correlation between poor credit scores and the likelihood of a person having an accident or making a claim.

These scores are built into a lot of ratings and it’s becoming more and more prevalent. The credit searches won’t impact your credit file and it’s also a way to confirm a person’s address. It’s an added layer of security.

6. Should I get car hire excess insurance when I rent a car?

We would never advise somebody not to take out car hire insurance when renting a car. However, it’s sensible to make sure you understand the costs and consider the alternatives.

Consider looking at independent cover, as this can often work out cheaper than buying insurance direct from the car rental company.

7. When will my car insurance go down after an accident?

Your no claims discount will start accruing after five years without making any claims. It’s about rebuilding trust and showing you’ve had a period of safe driving.

8. Would installing a dashcam help me get cheaper car insurance?

As it stands, some insurance providers may offer a discount if you let them know you have a dashcam. It could also help if there’s a claim made against you, for example, as it could prove you weren’t at fault.

9. Do different engine sizes need different types of insurance?

The short answer is no. Each premium is based on certain considerations, including the type of car you drive and the level of cover required, so engine size will be one of the factors considered. However, different engine sizes don’t need different types of insurance – it’s merely one of many sums that form part of the calculation.

10. Will my car’s transmission affect the cost of my insurance?

Again, this is one of the factors that might be taken into account. How much could vary among insurance providers. Eco-friendly cars won’t necessarily qualify for lower premiums.

11. Will buying winter tyres help me get cheap car insurance?

If you live in an area prone to heavy snowfall and ice, winter tyres could help make an accident less likely. But simply having them fitted isn’t enough to make a dent in the price of your policy.

12. Do I have to declare a service plan when I buy car insurance?

No. A service plan, as well as a car’s service history, is irrelevant to insurance providers.

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