How is car insurance worked out
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Car insurance

How is car insurance worked out?

Well, there's this group called the National Unfairness Commission and they basically pick a number out of a hat and pin it on your name.

I joke - but it sure can feel like that, I know. What we have to remember (as we grit our teeth and enter our bank card details) is that insurance protects us from the muuuuuuuuuuuuuch bigger cost of a crash.

Here's a few of the things that make your insurance cost what it does:

  1. Your age

    Yup, that's a big one. You know it, I know it. If you're under 25, it's likely you're going to pay more for your insurance than someone a few years older. I just got my first car insurance policy at the ripe old age of 26 and - for the first time ever - appreciated getting older.

    So why is insurance so much more expensive for youngers? Because statistically, you're a higher risk. More young drivers crash than older drivers. Sucks if you happen to be a super safe driver but traditional insurance just works that way.

    BUT. Futuristic insurance (like ours, obviously) lets you show exactly how you drive using black box tech. We collect data on your speed, acceleration, braking and cornering, and that tells us how much of a risk you are. If you drive well, you get discounts on the premium you paid at the start.

    ingenie driving feedback

    You'll sometimes find that black box insurers will actually give you a better quote upfront because they'll be able to adjust your premium according to how you drive over the year - so you get the benefit of the doubt. Our customers tell us they save an average of £500 by insuring with us.

  2. Your postcode

    Where you live affects your insurance because insurers obviously know where most claims come from. If you happen to live somewhere that sees a lot of car theft or accident claims, guess what? It's annoying but they're just going with the stats.

    One of our customers, Hanna, knew she lived in a higher risk area so didn't think she'd be able to get a car right away. But then she got a quote from ingenie and it all turned out OK. 🙂

    ingenie driver Hanna
    Being in a high risk post code I thought I wouldn’t be able to drive for a few years after passing my test, as the insurance would be too high. If we hadn’t discovered ingenie I still would not be insured.

    Hanna, 19
    Saved £1,000 by choosing ingenie

  3. Your mileage

    More miles = more risk because you're on the road for more time. It's really important to calculate your annual mileage carefully because it's not uncommon for insurers to charge for extra miles. Don't deliberately understate your predicted mileage - it could cost you later.

    Think about what you'll be using your car for: if you'll be commuting to work or college/uni every day, work out how many miles a day that is. Multiply that by how many days you'll be doing a year (remember to subtract holiday!), plus a little extra for days out and weekend driving.

    Mileage = miles per day x 365 - holidays + weekend miles
  4. Your car

    So long as you choose a fairly sensible car, this lives downhill on the list because, while a factor, the cost of your car isn't the most important thing. Trust me, replacing a nice-ish £1,500 car is NOTHING in comparison to the astronomical medical costs involved in a bad crash.

    Consequently, as a young driver - a driver statistically more likely to crash - your insurance could very well come to more than the cost of your car.

    There are things you can do: keep the engine size to 1.4 litres or below, avoid modifications, pick a low insurance group, steer well clear or sports editions or convertibles and maybe just go for a 'sensible' option for the first few years you're on the road. The money you'll save will be a nice contribution towards the car you really want when you've got a few driving years behind you.

    Check out our favourite cars from insurance group 1 - the cheapest cars to insure.
  5. Your driving history

    If you've not had insurance before that means no No Claims Discount but also no past issues to drag you down (unless you got caught doing something naughty while you were a provisional driver). It's a clean slate.

    Any driving convictions or claims are going to have an effect on your premium. For instance, a drink driving conviction could see your premiums rise for several years.

    It's quite likely that you'll have a named driver on your first insurance policy (usually Mum or Dad) so you need to know that their driving history is a factor here too. You have to tell your insurer about any convictions or claims they've had in the last few years.

  6. Your licence

    Whether you have a learner or full licence has a big impact on your premium. If you do some private practice in your own car or someone else's, you may buy your own insurance policy. Something you need to know: when you upgrade to that pink licence, your insurance is quite likely to go up.

    Why the what the HOW? I klnow - surely you're a better driver now you've passed? Unfortunately, you're actually much more likely to crash once you've got your full licence. Insurers know you'll be driving alone for the first time (and without those lovely dual controls) - plus, you're going to be driving a lot more miles. Both those things spell RISK.

    To make sure you don't get a nasty surprise, run 2 quotes with any insurer you're checking out. The first should have all your details including your provisional licence; the second should be identical but with a full licence. This will give you an idea of how much of a difference you could be looking at.

    Just so you know - we love learners and full licence drivers. If you start with us, we'd like you to stay. The great thing about black box insurance is that you get to show how good you are at driving, and pay what's fair as a result.

    Get some more information about learner driver car insurance.

There are LOADS more factors that go into calculating your premium - your job, what you use your car for, where you keep the car at night - but these are the main ones. No one can predict exactly what your car insurance will cost you and it might be different from day to day because insurers regularly update their prices. Make sure you shop around, try different cars and get all your details spot on.

Just remember: being covered in case you crash is the most important thing. Please don't be tempted to gloss over the facts to save a few quid now - it could cost you massively later on.


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Honor joined ingenie in 2014 and is in charge of words on the Young Driver's Guide and blog. Her first car is a Peugeot 206 cabriolet, which is a very sensible choice for the British climate. Follow her on .