Five factors pushing up your car insurance renewal price

Roger could sacrecely believe his car insurance renewal price
"1.2m drivers take to the road without insurance...and that makes it more expensive for the rest of us."
  • | by Kristian Dando

Car insurance  – for lots of us, it isn’t getting any cheaper. In fact, it’s been on a seemingly unstoppable rise for many a year now. But what on earth is causing the consecutive year-on-year hikes?


The last decade saw a huge surge in personal injury claims and the arrival in the UK of an American-style compensation culture.

One of the biggest – and arguably most damaging – facets of this was the massive upsurge in whiplash claims from minor car accidents.

Car insurance is there precisely to take care of this sort of thing, should it happen. But here’s the rub – whiplash is notoriously difficult to diagnose and prove, and despite road traffic accidents decreasing, whiplash claims are going up. “We have fewer crashes than all of Europe but more claims. We either have weaker necks — or there’s more fraud,” reckons the Insurance Fraud Bureau's Phil Bird.

Thankfully, there’s talk afoot to put a halt to this apparent feeding frenzy – only this year the insurance industry converged on Parliament to talk to justice secretary Ken Clarke and chew over this very matter. A raft of measures were mooted, including the introduction of a minimum speed threshold for a claim to take place. Whether or not the proposals will have much an impact – if you pardon the turn of phrase – remains to be seen…

Additional cost to average insurance policy every year: £90 (According to ABI figures)


When two cars are involved in a prang, the innocent driver may be offered a car while theirs is getting fixed. But is this apparent ‘courtesy car’ all it seems? Well, in some instances, no.

Dubious credit hire firms charge exorbitant fees for cars compared to standard firms, and very often, the cars don’t match up – it’s not uncommon for the credit hire firms to bill insurers for luxury barges when a hatchback turns up.

Criminal gangs are also getting in on the act (more on them later), as are complicit drivers who, whether they or know it or not, could end up out of pocket...and on the wrong side of the law.

Additional cost to average insurance policy every year:  Around £50, as part of wider insurance fraud. (According to ABI figures)


When you think about it, it’s quite sensible making car insurance a legal requirement for drivers – hundreds of thousands of large pieces of metal and glass travelling quite fast in close vicinity every day to each other sounds like a recipe for disaster, and sometimes , it is.

The thing is, about 1.2 million drivers (about 3.5% of all motorists, percentages fans) decide to take to the road without insurance, and that makes it more expensive for the rest of us. The Motor Insurers' Bureau, the organisation which exists to compensate victims of uninsured drivers, reckons that it adds about £400m to Britain’s collective annual insurance policy every year – that’s about £30 per driver. Worse still, uninsured drivers are estimated to kill 160 people and injure a further 23,000 every year.

Because of measures to curb uninsured drivers, like the introduction of Continuous Insurance Enforcement in 2010 (which made it legal for all cars to be uninsured, unless they were registered as off-the-road with the DVLA), the numbers have fallen but Britain is still amongst one of the worst offenders for uninsured drivers in Europe.

Additional cost to average insurance policy every year:  Around £30 per driver (According to Motor Insurers' Bureau figures)


To some career criminals, the car insurance industry is a particularly plump and juicy bird that’s right for plucking – often because it’s viewed as an apparently ‘victimless crime’. There are about 30,000 staged accidents every year, with a cost to the insurance industry of about £350m, according to the Insurance Fraud Bureau.

Popular ruses include situations where cars and vans are deliberately damaged to submit fraudulent claims, induced accidents where innocent and unsuspecting motorists are targeted by fraudsters who slam on their brakes to induce a rear-end smash and ‘ghost accidents’ where there’s a completely fictitious incident cooked up with the help of crooked garages and enablers to validate elements of the claim.

Additional cost to average insurance policy every year:  About £50 a year, according to ABI figures. (See also: dodgy credit hire)


This one hasn’t kicked in yet, but as of December 2012 insurers won’t be able to use a person’s sex to work out the cost of an annual car insurance policy. This is bad news for women – traditionally, women have often been given cheaper car insurance policies because they were viewed as a lower-risk prospect than men by insurers.

Potential cost to the average insurance policy every year: This is yet to be seen, but if you happen to be female then prepare for hefty hikes in your policy as of the beginning of next year...

If your car insurance renewal quote has left you agog, then mosey on over to’s spiffing car insurance comparison  service. You can check out quotes from loads of insurers and save yourself up to £852*.”

*10% of consumers could achieve this saving with car insurance.