It has been widely reported that car insurance has gone up drastically over the last year, if you own a vehicle and are due to renew your insurance you may have a shock in store.

Insurance premiums for some vehicles have doubled and for young new drivers, premiums are now so high that owning and insuring a vehicle is becoming almost beyond the reach of many.

The cost-of-living crisis has bitten hard with price hikes on everything, including insurance, of which motor insurance premiums have seen the highest rise.

So why are we paying so much?

There are several factors that have contributed to the rise including:

  • Soaring Costs – The cost of materials and goods which include car parts have risen by up to 50% in some cases. Fuel and transportation costs together with energy costs for manufacturing are to blame.
  • More Claims – Insurance claims are also at an all-time high. Crimes of burglary and motor theft are rife which means insurance companies are having to put up prices to cover payouts. Extreme weather has also led to more claims which is impacting our premiums across all insurances.
  • Less Competition – Several insurance businesses have merged, so there are fewer competitive quotes available, giving the consumer less choice. 
  • Fraud – Insurance fraud is another reason our premiums are rising; insurance companies are having to factor in expenses to cover losses due to fraud.
  • Uninsured Drivers – The number of uninsured drivers on the road in the UK is estimated to be over 1 million, consequently, it’s the people who do pay insurance premiums that foot the bill for these criminals.
  • Car Prices – Vehicles are getting more expensive, so when involved in an accident the cost of replacement or even just a repair is greater than ever. For example, a battery alone for the average electric car can cost between £8,000 and £10,000, that’s without the cost of labour. Some EV owners have seen their premiums rise 80% over the last few months and there are a few insurance brokers who will not insure Electric vehicles because of the high costs.

What to Do?

When renewing your insurance premium or taking out motor insurance do not just accept the first price quote, shop around on comparison sites and get quotes from the independent insurance brokers that do not appear on comparison sites. Call your current insurance broker and see if you can get a better deal, it helps if you are armed with alternative quotes from other companies.

  • If you are a careful driver and don’t do a lot of mileage it may be worth having a black box fitted in your car, this could get you a cheaper insurance quote.
  • Try changing the wording of your job title, strangely this can make a difference.
  • Consider adding a named driver that has more experience and no claims against them.
  • Install security measures, these can bring your insurance premium cost down.
  • If you can park your car offroad in a drive or garage this may be reflected in your quote, as an insurance company will consider it more secure and out of harm’s way.

There is no doubt the motorist is currently feeling the pinch and there is little likelihood of the situation improving anytime soon. There is every chance it may get worse, as more drivers are unable to afford insurance and choose to drive without it.

The scenario of being involved in an accident with an uninsured driver is becoming a possibility for many more motorists. Unfortunately, even if you have fully comprehensive insurance and protected no claims you are destined to have your insurance renewal impacted negatively because of a claim.