Last updated May 25 2020
Car insurance prices are based on several risk and economic factors. Due to this, car insurance premiums can fluctuate. Where you may have control over some possible risk factors, the economic factors are beyond your control. It tends to be more expensive when you are a younger or older driver and once you are over 25 insurance prices are likely to plateau or decrease.
Risk Factors can cause your insurance price to increase, so if your insurer believes you are high risk it is possible they will increase your premium.
Insurance providers base this risk on different areas, such as if you have points on your license or have had any accidents in the last 5 years and submitted a claim to your insurer. These highlight an increase in risk to your insurer, which may result in them increasing the price of your insurance. Other risk factors include:
There are certain economic factors that can also cause your insurance price to go up that are out of your control. These include insurance premium tax; this is a standard rate of 12% but this doubled between 2015 and 2017 from 6% to 12%. Unfortunately, the number of uninsured drivers on the road can affect insurance prices, for example, when in an accident with an uninsured driver you are able to submit a claim to the Motor Insurance Bureau, which affects car insurance prices as they retrieve the funds paid out by increasing premiums for law-abiding drivers. Another economic factor is the “Ogden Rate”, which is what is used to calculate personal injury claims. As of March 2017, the discount given to insurers was reduced to 0.75%, as a result claimants may receive bigger pay-outs at the cost of their insurance company.
There are many factors that contribute to the price of your insurance policy that are beyond your control, including:
There are ways to ensure you are getting the best price for your car insurance. When renewing your policy you can consider: