Caroline Minns was shocked when she received her car insurance renewal bill, unsure how her provider could justify increasing it from £550 to £1,400.
The 53-year-old publicist received the renewal last month from her insurer, LV, for her Skoda Superb which she has owned for two years. It was the equivalent of an 154 per cent hike.
“I could not find anything cheaper than £1,400 on price comparison websites, or even going to insurers directly.”
Eventually, she managed to get a deal for £1,200 using the insurance broker Howden, but this was still 118 per cent more than she was paying originally.
Caroline, from London, is not the only one who has seen the cost of their car insurance rocketing this year with drivers shocked at how much they are expected to pay at renewal.
Prices have reached a record high according to Confused.com, which said the average cost of insurance increased by 58 per cent in just 12 months, the equivalent of an additional £338 per person.
This is for several reasons, including high inflation, which is only now filtering through to drivers, as well as the rise of electric vehicles.
These cars tend to have more sophisticated machinery and are therefore more costly to repair. The higher cost of repairs is being spread across the board to motorists, as opposed to just EV owners.
Susan Antscherl, 83, told i she has also seen her insurance with LV soar, doubling this year.
“My car insurance went from £1,000 to £2,000 in August. I was shocked, it was the largest increase I have ever had.”
Susan, also from London, has had her VW Polo for three years and said she is not the only one who has experienced such a shock.
“Everyone is saying the same. Friends and family have all seen increases.”
The retiree renewed the deal, as it included another person on the insurance for no extra cost, a perk she wanted to keep. Other deals at a cheaper price were also hard to come by.
“I think the insurance industry is taking advantage in the current cost of living crisis by raising their prices.”
Louise Thomas, motor expert at Confused.com, said: “For another consecutive quarter, we’ve seen some of the highest inflation rates when it comes to car insurance. With prices up on average £148 – equivalent to 19 per cent – in just 3 months, drivers are likely to be paying more than ever.
“So those who haven’t yet been affected should be wary of how pricing may affect them at their next renewal.”
How can you save on car insurance?
Despite rising costs, there are still ways you can cut costs on your car insurance.
● Pay for your car insurance annually: If you can afford it, paying for your insurance in one go rather than monthly is one way to get cheaper car insurance. That’s because insurance companies often charge interest for spreading the cost of your cover over the year.
● Increase your voluntary excess: This can help you get cheaper car insurance. But you need to make sure you can afford to pay it, if you need to claim.
● Be accurate with mileage: Generally, the more miles you drive, the more likely you are to have an accident and make a claim. This means the higher your mileage, the more you pay for your car insurance. Driving fewer miles can be a great way to save money on your car insurance policy. But don’t assume that a low mileage always means low prices. If you barely drive at all, your insurance company could see that as a risk as well.
● Enhance your car security: The harder it is to steal your car, the less of a risk it is. This usually means cheaper car insurance. There are several ways to improve your car security including installing a Thatcham-approved car alarm or immobiliser, if it doesn’t already have one. Adding secondary levels of security such as a steering lock can also help as does parking overnight in a secure, well-lit car park, or at home in a garage or driveway, if possible.
● Use a price comparison site: If you’ve had a higher renewal quote, the best thing you can do is compare prices. That way you can ensure you’re getting the best deal to suit your needs and not paying more than you need to. And it’s likely that you can make a saving
