/ Money, Motoring

Have you clocked your car insurance creeping up?

Two cartoon cars in a collision

Car insurance is a grudge purchase for many of us and sadly it’s not a cheap one. To further increase the burden, the cost of car insurance continues to creep up, but why?

With premiums on the rise we decided to take a look into what’s fuelling these hikes.

Premium price to pay

The AA reports that the average comprehensive car insurance policy stands at around £1,000 today, compared to £450 back in 2000.

And that’s not because our roads are getting more dangerous. In fact, we’re having far fewer accidents and, according to the Department for Transport, our roads are safer than they’ve ever been.

When we spoke to some of the biggest car insurers, we were told that the cost of claims makes up the bulk of your premium. More specifically, that fraudulent claims are a big part of the reason insurance has got more expensive. According to the Association of British Insurers (ABI), the cost of fraud to the insurance industry adds around £50 to every premium.

And fraudulent claims aren’t just a result of organised criminal cash-for-crash gangs; there is also a problem with opportunistic fraud where drivers exaggerate the impact of a crash. This is often fuelled by claims management companies which cold-call members of the public in the hope, for example, that they will file a whiplash claim to their insurer (even if they might not have suffered any injury).

The insurance industry is taking action to help curb fraud, with the ABI estimating that the industry spends £200m each year on fighting fraud.

It’s not just fraud that’s whacking up costs here. Customers are also absorbing the costs for insurers’ admin and overheads, as well as the hike in insurance premium tax.

Lightening the load

Fortunately, there are things you can do to reduce your insurance costs.

It’s worth spending some time working your way through our top tips for saving on car insurance – where we explain, for example, why it doesn’t make sense to auto-renew your policy and why it does make sense to ensure you set the right excess.

So, have you noticed your car insurance creeping up in cost over the years?

Our full investigation into car insurance costs appears in the August edition of Which? Money magazine.


A lot of what you are saying is quite right I get on average 2 calls a week from some cold call company who says ‘I am ringing about the accident you had in your car, they are surfing in the hope you are going to say that you had some form of accident and they will then offer to help on a no win no fee basis. The other thing Car insurers should make it a lot more difficult for the fraudsters and demand concrete evidence to support any claims they are suspicious of. As it is now, they seem to accept and pay out then pile the money on the premiums of decent car drivers. I now do exactly the same with my car insurance renewal as I do with my energy, quite simply search around. Last year the Insurer I was with [no names but there is a dog involved] put my premium up over £100, I had not had any accident or made any claims when I queried the increase they indicated it was down to their policy underwriters, needless to say I shopped around and found good savings with another reliable insurer. The other area where savings can be made is with your Insurer Legal Fee policy most want to charge around £25-£30 for this addition but if you look for a stand alone policy it can offer the same cover at a fraction of the cost your car insurer wants to charge you. in these what I can only describe as ‘rip off times’ the best policy with any type of insurance is not to except your renewal quote until you have shopped around the market place.


First comment why the above posters icon in place of mine before I post ?


I have noticed odd things happening with your icon lately Duncan. One day there was some text in the circle but I think that was during the broadband outage problems. Why not get yourself a nice avatar to present a distinctive image?


My avatar has appeared alongside other people’s posts in ‘Recent activity’ on various occasions in the past couple of months. Maybe a topic for the New Which? Convo Convo.


John would it be the normal way of uploading an icon by email or what method does Which use ? I ask because different websites have their own security methods . By the way Patrick I am still getting the problem I emailed you about. Thanks for the attention John always appreciated.


Duncan – If you go to ‘Need help?’ in the banner across the top of the screen and click on the drop-down menu, the FAQ box will take you to the process. They call it a “Profile Photo” but it doesn’t have to be a personal picture – it can be any symbol or graphic that you like. There was once a brief discussion here about what people’s avatars said about them . . .


Thanks for the info John I will check it out .


I agree with the part of the Convo that says you shouldnt auto renew . As I said to two other regulars on another Convo ,. 14 years with the one car insurance company , wasnt happy with £414 so got an estimate — estimate– £246 — saving £168 . Phoned back -accepted , wont my regular insurance be upset when they cant DD £414 out of my account .


I wonder how much the cost of paying cashback adds to everyone’s policy. Even though I get on average £50-£60 a year back I’d be more than happy if that business was outlawed. If companies want to win new business, then maybe they should focus on offering good service and value for money, instead of cashback.