How Does the Cost of Car Insurance Change Over Time?

At Riviera Insurance, we know that the cost of motor insurance is a major concern for motorists across the UK. Many factors affect what you pay over time, including your driving record, insurance claims, your age, and where you live.

In this guide, we explain how your premium changes in price over time and why:

How the Cost of Car Insurance Changes Over Time

Your claims history is one of the biggest factors in how much your car insurance costs in the future.

Avoiding claims indicates to insurers that you are a safe policyholder and are more likely to offer cheaper premiums. Conversely, if you do make claims, your premium may increase depending on the circumstances.

Without Insurance Claims

Motorists who avoid making claims may benefit from a reduced cost of car insurance as time goes on.

This is largely due to building up a No Claims Bonus (NCB). The longer you drive without claiming, the bigger your discount.

With Insurance Claims

Making a claim, particularly one where you are at fault, will usually result in higher premiums. Insurers may see you as a higher risk and adjust your premium accordingly at renewal.

But what if you need to make a claim when you are not at fault? This depends upon your insurance provider.

Some providers offer specific packages that take the at-fault party of an accident into account. These packages will allow you to keep your no-claims streak. Other policies will not care who is at fault and will wipe your no claims streak regardless, unless your no claims bonus is protected. No Claims Bonus Protection will only protect your bonus, not the insurance premium which can still fluctuate. Make sure that your car insurance provider provides you fair insurance coverage that does not penalise you for somebody else’s mistake.

How Much Does the Cost Increase After an Insurance Claim?

This depends on the size of the claim, your insurer, and your previous history. If you had one, you would lose your no-claims bonus. After which, you will likely be assessed as a greater financial risk upon renewal.

Multiple claims within a short time can lead to an even greater increase.

Do Motor Insurance Costs Increase with Penalty Points?

Yes, penalty points can push up your premium quite significantly. Even three points for a minor offence can affect the cost of renewal.

More serious convictions, such as driving with no insurance or drink-driving, lead to much higher premiums. Insurers consider penalty points a risk indicator, which they factor into your premium. The effect of penalty points usually lasts for at least five years on your record.