Car insurance providers consider ‘risk factors’ when calculating a car insurance premium, including your age, postcode and the number of claims or accidents you’ve had in the past. Insurance providers use this information to calculate the risk you may pose on the road and the likelihood of you making regular claims. However, premiums still vary significantly from one car insurance provider to another.
Younger, more inexperienced drivers are known to cause more accidents. The Association of British Insurers found that although only 12% of drivers are aged between 17 and 24, that age group is still responsible for almost 30% of accidents.
A mature driver with a history of no claims is generally a lower risk to a car insurance provider than a younger driver. A lower premium simply reflects a lower calculated risk.
Statistically speaking, women live longer and are less likely to be involved in a car accident than men. Women therefore pose a lower risk to car insurers and in the past have paid lower premiums.
However since an anti-discrimination ruling by the European Court of Justice in 2012, insurers cannot take a customer’s gender into account when setting their insurance premiums.
Types of car
Each car built in the UK is assigned an insurance group by The Group Rating Panel, using statistics from the Motor Insurance Repair Research Centre.
There are 50 different groups - cars in the highest numbered groups tend to be the most expensive as they are seen as the riskiest cars to drive.
Factors they look at include:
Cost of repairs – including time taken to fix the car and the cost of price of replacement parts
Performance – faster acceleration and top speeds increase the likelihood of a claim
Purchase and/or market value
Security features – cars with car alarm, car immobiliser, glass etching etc. all minimise the risk of theft
Age of car
A car with a more powerful engine, for example, will generally be more expensive to insure. Cars which can accelerate more quickly and maintain higher speeds on the road are potentially more at risk of accidents than slower, older cars.
Smaller, fuel-efficient cars tend to be in the lowest Car Insurance Groups such as the Nissan Micra, Volkswagen Up! and the Ford Ka. Bigger or sporty cars will normally be in the higher groups – such as the Range Rover Sport and the Porsche 911.
Check which car insurance group your car falls into with the Parkers Insurance Group calculator.
If you’ve decided on a car but have realised it’s in a high insurance group, it’s worth doing your research, as similar cars may have very different insurance groups.
Different car insurance premium prices between providers
Different providers also look at different risk factors when calculating premiums, which lead to different results.
Ways to reduce my car insurance premium:
Fit extra security to your car, such as an immobiliser or additional locks, to reduce your car’s risk of theft.
Keep your mileage low as the more time you spend on the road, the more likely you are to be involved in an accident.
Pay a higher excess to lower your premium. The excess is the first part of any claim that you’ll need to pay – so be sure you’re happy to pay that amount in case you make a claim.
John Lewis Finance, John Lewis Insurance and John Lewis & Partners are trading names of John Lewis plc. John Lewis plc is an appointed representative (registration no. 416011) of Covea Insurance plc which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (registration no. 202277). John Lewis Car Insurance is underwritten by Covea Insurance plc. Registered Office: Norman Place, Reading, Berkshire RG1 8DA. Registered in England and Wales (no. 613259).