Five things that make car insurance more expensiveFactors that could affect the cost of your cover

22 March 2010

Car insurance

Switch car insurance for the best price and service

If you’re looking for low-cost car insurance, it’s worth being aware that factors above and beyond the company you choose will affect the price of your premium.

Last week Which? reported that Admiral Insurance Group quotes non-UK born drivers higher prices for the same level of cover, compared with those who have lived in this country all their lives.

While this is not an industry-wide practice – and Which? believes it is in breach of the Race Relations Act - there are other things you can’t always control which may have an impact on how much your cover costs. Here are five examples, and some tips on how you can prevent them from driving up the price you pay.

1. Your car's location

Insurance companies price all policies based on the risk that you will eventually make a claim. One of the factors they will consider when calculating this risk is your postcode.

Data on how many cars have been stolen, criminally damaged or involved in accidents in your area will be held by your insurer. If their statistics show vehicles kept there are particularly vulnerable to such incidents, it’s likely your policy will cost more.

Luckily, moving house is not the only option if you’re looking to keep the price of your car insurance down. Security measures such as keeping your car in a garage or on a drive rather than parking it on the street, and fitting it with an immobiliser or alarm, should help minimise the risk to your vehicle.

Provided you make your insurer aware of the security steps you’ve taken, they should also help mitigate any effects your postcode might have on your premium.

2. Your age

People aged under 25 or over 65 are often hit with hefty car insurance premiums. Insurers’ data shows that people in those age groups are more likely to make claims.

While the Equality Bill (first introduced to Parliament in 2009) may mean insurers have to provide evidence that older or younger drivers represent an increased risk, it is unlikely to prevent the practice of age ‘discrimination’ by insurance companies.

If you are under 25 and looking to lower your car insurance costs, steps such as taking a Pass Plus course should help. Older drivers may find better deals on car insurance are available from specialist providers such as Saga.

3. The car you drive

While it may seem obvious that your choice of vehicle will affect the price of your car cover, you might be surprised to find out how cheap (or expensive!) some models are to insure.

The price of your car insurance policy will be affected not only by how powerful your car's engine is, but by how much you paid for your vehicle, how secure it is deemed to be and the cost of spare parts for it.

Thatcham groups vehicles into 20 categories on behalf of the Association of British Insurers, and the category your car falls into will have a noticeable impact on your insurance costs. Also, modified vehicles usually cost more to insure than unmodified ones.

4. Your gender

Women are statistically less likely to be involved in serious car accidents than men, and as a result their car insurance usually costs less. Several companies now specialise in policies for women.

Again, it is unlikely that the Equality Bill will affect car insurers’ ability to treat female customers differently from males, provided they have proof that women make fewer insurance claims.

If you’re a woman driver, it is worth checking whether a company such as Sheila’s Wheels can offer you cheaper car insurance – although it’s important to compare a variety of deals before committing to a policy.

In addition, whether you are male or female, you can keep on top of car insurance costs by driving safely, ensuring you are not convicted of offences such as speeding and protecting your no-claims bonus.

5. Your job

Finally, your job title can also affect the price you are charged for car insurance. If you have a job that could reasonably be described using several different terms (for example, a ‘journalist’ might also call themselves a ‘writer’), you could experiment with them when comparing insurance quotes to see whether prices vary.

However, you must be careful never to use a job title on your insurance application form which does not describe what you do for a living. This would be fraudulent and could invalidate any future insurance claim you tried to make.

Which? recommended car insurance providers

If you're looking for a better deal on car insurance but also want a high quality policy and good customer service from the provider you choose, be sure to check out the Which? car insurance review. Our recommended providers are recommended on the standard of the cover and customer service they offer as well as the prices they quote - so you can be sure of getting great value for money.


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