Car insurance is a necessity for all road users and can be expensive.
This is generally dependent on several factors that can include things such as your driving experience, any claims you've made previously, or even the postcode you live in.
When you get your car insurance renewal quote through, you would like to hope that it's either remained the same as last year or even gone down in price.
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However, you could get it through and see that the price has increased, which may come as a shock particularly if you feel like nothing has changed in your circumstances.
We take a look at some of the potential reasons why your renewal price has increased and how you can prevent it from doing so again in the future.
Why has my car insurance gone up in price?
There are generally two different reasons why your car insurance renewal price may have increased.
The first one is something that is beyond your control and that's economic circumstances that are controlled by the government.
The other reason is your risk factor has increased, and this is something that you may be able to influence going forward.
Economic factors for car insurance increase
The government charges insurance premium tax to all policies and this could go up or down depending on the chancellor's annual budget.
For example between 2015 and 2017, it rose by 6% to 12% which added an average of £25 to all insurance policies.
Another economic factor is serious injury compensation that is claimed for such major incidents and is also known as the Ogden rate.
This is used to establish how much compensation is paid out and can therefore fluctuate in price on your policy, affecting the overall annual cost.
Uninsured drivers are the final factor and if you are hit by one, you may be able to claim for it through the Motor Insurance Bureau (MIB).
This can impact the overall price for all insured drivers as the price sometimes needs to be raised in order to be able to help the MIB repay the money in these instances.
Risk factors for car insurance increase
Every road user must take out insurance because there is a risk to driving and therefore the appropriate cover needs to be taken out to protect you if something goes wrong.
Insurance companies will look at your risk level based on several different factors and if you are deemed a higher risk, then you will likely have to pay more for that insurance.
Risks can be categorised into things you can easily control and things you could control but it may not be worth the time and money to do so.
For example, car accidents would be easy to control as you could ensure you drive more carefully to ensure your own and other drivers' safety.
But something like your occupation may be harder to manage because you're not going to uproot your work just to save a bit of money on your car insurance.
So it can be a tricky one, but we have listed all the risk factors that could affect your insurance premium.
Regardless of whether a car accident is your fault or not, it sadly will affect the price of your insurance when you come to renew.
If an accident was your fault, then the likelihood is the price will rise quite significantly as your risk factor has increased.
If the number of overall car accidents around the country increase, then insurers may put a general price rise on all insurance policies to cover what they will have to pay out in the future.
If you have previously been convicted of a criminal offence, insurers will immediately deem you high risk and your policy will likely be higher than the average citizen.
It's important that you declare any unspent convictions to your insurer as a basic criminal records check will uncover it anyway and could affect any payout you receive if you lie.
You can withhold spent convictions, however, if asked you should be prepared to disclose them.
Points on your license
If you have received points on your license then the likelihood is your insurance will increase in price due to the increased risk you put yourself in when gaining those points.
Points can stay on your license for more than four years depending on the severity of the incident you got your points, so you need to be extra careful, not just for your safety, but to save yourself money in the long run.
Like criminal convictions, you need to disclose points on your license, and failure to do so could see insurers refuse to pay out if you make a claim.
Car modifications may make your car look better (in your opinion), or increase its value slightly, but it could also risk you having to pay more for your insurance.
This is because it increases the risk of your car attracting unwanted attention from thieves, particularly if you've added a feature that you don't see on many cars.
A modification can be as big as adding a spoiler or increasing the engine size of the car, to as little as getting it sprayed a different colour; modifications aren't generally categorised, they are all classed the same, regardless of what you modify.
Once again, it's the risk factor involved that increases the price and puts your car in a little bit more jeopardy than it perhaps was before.
Insurers have a list of jobs deemed more high risk than others which isn't necessarily fair on you but a factor that must be accounted for by the companies in order to not lose money.
Always be honest on your application with the job you do, even if it has a higher price than something else, because if caught out, they may refuse to pay out or even offer you cover in the future.
The car's value
Unfortunately, if your car is valued at a higher price, it's more likely to set you back on the insurance due to increased chances of it being stolen and also just generally being more expensive to maintain.
Having a nice expensive car is great, but there are additional setbacks.
Your home address
Moving to a different postcode could increase your premium, particularly if there are higher levels of criminal activity reported there.
It puts your car at a higher risk of being stolen or damaged if the area is more renowned for crimes occurring.
This can also include moving to a new house that doesn't have a driveway and therefore your car is parked on the street or out of sight from your house.
Car insurance summary
Generally speaking, a lot of these factors are out of your control and can seem a little unfair that you are having to pay more because of them.
However, it is mandatory to have car insurance, and therefore you just have to go with the flow.
Of course, you can shop around for better deals and quotes and go with what you are most happy with.
But the key is to always be honest on your applications as it could seriously impact any future claims.