Your car insurance questions answered

With so many things factored in to calculate our premiums, we wouldn’t be surprised if you had a few questions. Let’s take a look and answer some of them.

With so many things factored in to calculate our premiums, we wouldn’t be surprised if you had a few questions. Let’s take a look and answer some of them.

Julie Daniels
Insurance expert
5
minute read
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Last Updated 3 AUGUST 2022

1. What are car insurance prices based on?

The cost of your car insurance is calculated based on details about you and your car. This includes your:

  • car’s make and model – higher-end models are more expensive to insure
  • age – younger drivers are usually more expensive
  • address – high-crime areas could raise your premiums
  • no claims discount - going years without a claim will earn you a bigger discount
  • driving history – convictions, points on licence etc.
  • job – do you use your car for work? 

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

Car insurance for young drivers is usually more expensive. This is because, statistically,  they’re more likely to be involved in an accident.

While there’s no one policy that’s the cheapest car insurance for young drivers, there are ways to save on your premiums. 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 behaviours and may look at offering discounts.

3.Why does my job affect car insurance?

Your job affects your car insurance 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 several reasons for this, which is why it’s important to shop around and compare car insurance quotes. 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 have an impact, but so can you. For example, incurring points on your licence, being involved in an accident  or making a claim will likely see your premiums rise.

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.

Since 1 January 2022, new regulations mean that car insurance providers are no longer allowed to charge renewing customers more than new ones. This means you should no longer be a victim of “price walking”, which is when insurance providers disproportionately increase premiums for existing customers.

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?

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.

However, dashcams are often placed in a highly-visible spot in your car, this could make them attractive to thieves, raising the risk of you needing to make a claim.

If you’re unsure about installing a dashcam, it’s a good idea to speak to your insurance provider and find out how it’ll affect your premium.

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

No, but 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?

Eco-friendly cars won’t necessarily qualify for lower premiums, but your transmission is one of the factors that are taken into account. How much it could affect the cost of your insurance may vary among insurance providers.

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 get cheaper car insurance.

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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