Your car renewal quote explained
How do you decide my car renewal price?
There are many things insurers consider when deciding your car insurance renewal price. Even if you haven't made a claim, external factors can affect renewal price, such as the increase in the cost of repairs, and personal factors can affect renewal price, such as how long you have been driving for. These all impact how we calculate the money (or premium), we need to charge. Here's how it works:
- The premiums go into a pool along with other customers' payments [1]
- We draw from that pool to payout if you, or other customers make a claim.
At Ageas, we do our best to continually review our prices and offer our customers the most competitive renewal possible.
There are also factors that can help to bring your car insurance down, such as having a year of no claims, limiting your mileage, reviewing the add-ons you need and the amount of voluntary excess you choose to pay.
- Crime: In 2023, insurers paid out £9.9 billion for thefts from or of a vehicle – a record amount[4] Another reason prices rise is insurance fraud, for example the ‘cash for crash’ moped scam that has been widely reported in the media. Theft and fraud increase everyone’s premiums.
- Energy prices: Gas and electricity prices have risen since the Ukraine war, adding to all insurers’ costs, due to the higher costs of materials, manufacturing, labour and maintenance. Some UK garages saw a 300% increase in energy costs in 2023.
- Inflation: Economic factors like inflation can affect monthly insurance premiums. When inflation is high, the price of materials and labour rise and the total cost of repairs increases. These costs are passed onto customers.[2]
- Repair costs: According to the Association of British Insurers (ABI), vehicle repairs cost 31% more in 2023 than in 2022 [5]. We look at the impact of trends such as the rising popularity of electric cars, which cost more to fix as they require specialist mechanics.
- Tax: You pay Insurance Premium Tax (IPT) rather than VAT on car insurance and other insurance products. The 12% rate adds £67 to average motor insurance premiums.[5]
- Technology: Cars are becoming more sophisticated, with everything from cameras to sensors being expensive to repair and replace as specific skills are required.[3]
- Weather events: As a warmer climate brings more weather-related claims for car and home damage, premiums will likely continue to rise.
- Your address:
- We can learn about your area. Knowing things such as recorded car theft figures[6] or the number of accidents and claims people make helps us establish your risk. For example, your premiums may rise if you move from the country to a city with more cars, increasing the likelihood of a claim.[7]
- Your insurance renewal quote could rise depending on who drives your car. Young drivers from 17 to 24 have a higher risk of being involved in fatal or severe collisions. As a result, insurance premiums are higher for younger, less experienced drivers. However, we also factor in data on older drivers as the risk of personal injuries or damage to vehicles increases for those over 70.
- Your car: An older car usually costs more to insure than a new one because it often costs more to repair. However, as an expensive car is more likely to be stolen, it may also mean higher premiums.
- Adding a named driver to your policy: A classic reason for a rise in costs is an older, more experienced policyholder like a parent adding a child who’s just passed their driving test to their policy. New drivers are considered to be high-risk. Conversely, if you’re a young driver, you may save costs by adding a lower-risk named driver to your policy.[8]
- Your driving history: If you have had several accidents, you’ll likely see a rise in your insurance premium at renewal. How many miles you drive each year can also affect the price – the fewer you drive, the lower you can expect your premium to be. Past claims will also affect your price.
- Your job: Changing jobs is another indicator used to estimate potential risk, which may affect your renewal price. For example, you may represent a higher risk if your job involves driving at night or after a long shift, such as an emergency response worker.[9].
The price of car insurance, like other kinds of insurance, is not based solely on your personal circumstances. Outside factors like increased theft or more expensive car parts could have changed your quote, so it’s more or less than before.
We offer the same price to new and existing customers. Our renewal price is based on our latest datasets and you won't be charged any more than the equivalent new business price.
We think it is fairer and more convenient for our customers if we provide our final price from the outset based on the information we hold for you.
If you have made a claim within the last five years, typically, you’ll see some increase in the price of your insurance policy. For any new claim, we’ll revise the renewal quote to factor it in if we know about it before we send the renewal invitation to you. If we’ve sent your renewal quote after your claim, we’ll need to revise it.
If you don’t make a claim over the year, then this can be added to your No Claims Discount, the level of discount for just a single year without claims could be around 10% or less. However, the cost of your car insurance policy could be significantly less for drivers who have gone five years or longer without making a claim.
Your renewal invitation will include a revised no-claims bonus and your renewal quotation.
You should tell us about any changes to your vehicle or personal changes such as a promotion or a new job. View the policy document for the full list of changes (go to page 4)
If you are not sure whether certain information needs to be disclosed, please contact us. Simply log into your online account and edit the policy details of the driver whose circumstances have changed or update your new car details and/or number plate.
If you make a change via your online account, there’s no administration fee. However, there is a £25 administration fee if you make changes to your policy via email, phone, post or Live Chat. You can also speak to a member of our Live Chat team via our Virtual Assistant.
We can’t tell you precisely because insurance premiums go into a pot of money that pays for claims.
However, the ABI has broken down the claims and costs for the insurance market into the key areas below:
- Injury - 30%
- Damage to the driver’s vehicle - 20%
- Damage to other cars and property - 19%
- Overheads - 17%
- Theft, replacement vehicles, uninsured drivers - each 4%
- Windscreens 2%