You've made no claims, so why IS your home and car cover shooting up? (2022)

Soaring car and home insurance bills are the latest sting for struggling families as the cost-of-living crisis continues to bite.

Motor policies are £51 more expensive than last year, on average. It's even worse for young drivers, who face rises of £100 or more, researchers found.

Meanwhile, home insurance premiums are up by 6 per cent typically, from £178 for a year's cover to £189. And these are just average rises, with some households reporting that costs have doubled.

Driving costs: Motor insurance policies are £50 more expensive than last year, on average and it's even worse for young drivers, who face rises of £100 or more

Experts say rocketing premiums are largely down to inflation pushing up the cost of claims — and more accidents after road traffic grew post-pandemic.

But as household bills balloon, there are fears desperate customers may be tempted to cancel vital cover altogether. Just this month the Financial Conduct Authority warned that some people could be left without a safety net.

Matthew Upton, Citizens Advice director of policy, adds: 'It's essential people can access insurance. But we know people are having to make difficult choices as they try to pay bills.'

Damning data

Research by Compare the Market found the average motorist buying an annual car insurance policy between April and June this year paid £704, up from £653 in the same three months of 2021.

Younger drivers aged 17 to 24 paid £1,247, up from £1,112 last year.

Julie Daniels, motor insurance expert at comparethemarket.com, says: 'This rise in premiums is a result of increased cost pressures for insurers, including an uplift in the value of second-hand cars and higher repair costs.

'As the cost of claims has increased, insurers are now passing on these costs to customers through higher premiums.'

The study also found cars with big engines attracted higher insurance bills — even if the vehicle is worth less.

The average cost of a year's cover for a £2,232 Vauxhall Corsa SXi, that has a powerful engine, was £882 in 2022 — up by 18 per cent from £748 the year before. Motorists with a Fiat 500 Lounge, worth £5,119, paid £521 for insurance, up 12 per cent from £464 in 2021.

Research by Compare the Market found the average motorist buying a car insurance policy between April and June this year paid £704, up from £653 in the same three months of 2021

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Loyalty costs

The spike in insurance prices comes despite changes which were supposed to mean cheaper premiums this year for loyal customers.

For years, millions of policyholders were penalised with relentless premium hikes at renewal. Now, they can have access to the same discounts as new customers.

Research firm Mintel found a policy's price is the biggest consideration for nearly half of motorists when they are choosing between insurers. And experts say rising premiums have led some to consider selling their cars.

Aviva's customers have also faced huge rises in home insurance, even if they haven't made a claim.

Church pastor Martin Pearson had been with the firm for nine years when it tried to hike the premium for his three-bed semi by 22 per cent this month. The grandfather was quoted £207 — £37 more than what he paid last year.

Martin, from Stroud, Gloucestershire, who found a quote with another firm for just £145, says: 'I can't see how a 22 per cent increase, when there have been no changes or claims, can be justified.'

An Aviva spokesman says Martin's quote was 'fully compliant with the new FCA rules' and lower than the price he would have been offered as a new customer.

Here's how to drive down prices

  • Pay your annual bill in one go. Motorists who spread the cost of their premiums over 12 months will be charged £60 more on average, while home insurance policyholders will pay £13 more, according to comparethemarket.com.
  • Don't double up on cover. Admiral estimates nearly a million motorists pay for separate breakdown insurance while already being covered through a car policy.
  • Tweak your job title, but be accurate. Motorists who say they work in software rather than computer games could save £100, according to MoneySavingExpert.
  • Telematics boxes monitor your driving habits and can cut premiums. MoneySuperMarket data suggests the average 17 to 19-year-old saves £145.
  • Increase your voluntary excess. Opting to pay more if you make a claim will bring your premium down.
  • Overestimating the value of possessions may mean you pay an unnecessarily high premium for a contents policy. If you don't know an item's value and have lost the receipt, try checking online.
  • Keep shopping around. Motorists save £54 on average by using comparison sites, according to Confused.com. And always haggle with your existing provider.
  • Drive safely. No-claims bonuses can cut a premium by as much as 60 per cent.

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Future fears

Experts fear the economic climate could turn people into criminals if tempted to make false claims or drive without insurance.

A poll by Consumer Intelligence last month found one in five people would consider insurance fraud, up from one in ten in 2021.

Uninsured drivers risk a £300 fine and six penalty points on their licence. Those without home insurance could pay hundreds of thousands in repairs for any storm, fire or flood damage.

Darren Black, general insurance head at Nationwide building society, says some are already cancelling their cover.

Soaring bills: Home insurance premiums are up by 6% on average, from £178 for a year's cover to £189

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And there may be further hikes to come.

Direct Line blames inflation for pushing up the cost of insurance claims, as its shares fell to their lowest level in a decade.

The firm warned that while it had increased premiums, they were still lagging behind the cost of payouts.

Jenny Ross, Which? money editor, warns: 'The FCA should be keeping a close eye on how insurance providers are setting prices.'

An Association of British Insurers spokesman says firms are committed to keeping prices 'as competitive as possible', adding: 'Like many other industries, insurers are facing increasing cost pressures, including some building materials, supply chain issues and more expensive vehicle parts and repairs.'

f.parker@dailymail.co.uk

My motor premium DOUBLED in a year

By HENRY DEEDES

Of all the fiddly bits of personal admin that need doing each year, renewing your car insurance must rate as the most tedious.

Almost without fail, your current provider will be in touch to say your cover is going up, leaving you to hunt around on price comparison websites to find another deal.

I can't stand price comparison sites. They always seem to be trying to sell something I'm not even looking for, bombarding me with intrusive emails weeks after I've visited their site.

And the questions! They just go on for ever. How many miles do you drive each year? How many years no claims do you have? Is your car fitted with an industry-approved tracker/disabler/James Bond-issue ejector seat? Don't know, don't care.

In fact, it's such a faff that if the cost of my renewal quote with Sainsbury's Bank was only a few pounds more than what it was charging last year, I'd have been tempted to just accept it.

So imagine my shock when I checked to see the price it was quoting had jumped from £417 a year to a whopping £1,361.

At first, I assumed this was some sort of systems error. That perhaps it thought I'd switched from a modest 2-litre Mercedes to owning a McLaren F1. But after ringing Sainsbury's, it assured me everything was in order and that was price.

When I went to go and check out my other options online, I was also in for a nasty surprise. The cheapest deal available was around £800. Far better than what Sainbury's was offering. But still double what I had recently been paying.

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None of this makes any sense. I am (or at least should) be a poster boy for the insurance industry.

As a Londoner, I hardly drive much and when I do, the speedometer needle barely gets much of a workout. In the 27 years I've been on the road I have never sought so much as a bean in claims.

The only conclusion is this was part of the giant financial squeeze we're having to swallow.

Another blow to the household finances. And those plans to own a Ferrari are beginning to look more remote than ever.

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FAQs

Are insurance premiums going up? ›

NEW DELHI: The health insurance premiums have increased anywhere between 10-25% recently, thanks to higher average claims and increasing healthcare inflation. Sources from the health insurance sector say average claims over the past two years have gone up from Rs 40,000-50,000 to Rs 80,000.

What voids a car insurance claim? ›

What is voided car insurance? Voided car insurance is any policy that has been ruled invalid by the insurer. There are a number of reasons this may happen. The most common are that the customer fails to pay their premium, or has submitted false or incorrect information to the insurer.

Does car insurance continue after claim? ›

Will my car insurance increase after an accident? The short answer unfortunately is yes. Regardless of whose fault it was, making a claim will almost always lead to an increase in your car insurance premium. Luckily a non-fault claim won't affect it as much as an at-fault claim will.

What makes your car insurance go up? ›

Car insurance rates can change based on factors like claims, driving history, adding new drivers to your policy, and even your credit score. But they can also change based on a variety of reasons that are largely out of your control.

Are insurance premiums increasing 2022? ›

Every three in five Indians have experienced an increase of over 25% in health insurance premiums in 2022 after a sizable increase in 2021, with 38% witnessing a nearly 50% rise in their premiums.

What can void your home insurance? ›

What can invalidate my home insurance?
  • Leaving your house unoccupied for longer than your home insurance policy allows.
  • Not making necessary repairs.
  • Failing to secure your home, for example by leaving doors and windows unlocked.
  • Giving inaccurate information when taking out your policy.
30 Aug 2019

How long does a car accident stay on your insurance record UK? ›

How long do car insurance claims stay on my record? Any claim you make will be automatically recorded with the Claims and Underwriting Exchange (CUE). This data will be held on file for six years.

Do car insurance claims go to court? ›

Although most cases do not make it to court, some do. They are usually cases that fall into one of four categories – complex cases, unresponsive defendants or insurers, cases whereby the defendant is denying liability, and cases where claimants are looking for interim payments.

How much does car insurance increase after a claim? ›

If you have claimed on your car insurance, you can expect to pay 20% to 50% more for cover in the future. However, the amount varies depending on who is to blame for the claim, the severity and expense of the accident, and your overall driving record.

How much does car insurance go down after 1 year no claims? ›

The amount of discount earned increases with each year of claim-free driving. So after one year you might get 30%, with the percentage increasing each year until you get 70% NCD after five years. Most firms offer a maximum NCD of 70%, although some offer 75% or 80%.

How long does an insurance company have to investigate a claim? ›

Generally, the insurance company has about 30 days to investigate your auto insurance claim, though the number of days vary by state.

Why does insurance go up after a claim? ›

Why do insurance premiums go up after filing a claim? Homeowners insurance rates often increase after a claim because it leads your insurance company to believe that you are more likely to file another claim in the future. This is especially true for claims related to water damage, dog bites and theft.

Does car insurance affect credit score? ›

The short answer is no. There is no direct affect between car insurance and your credit, paying your insurance bill late or not at all could lead to debt collection reports. Debt collection reports do appear on your credit report (often for 7-10 years) and can be read by future lenders.

What factors affect car insurance premiums? ›

Some factors that may affect your auto insurance premiums are your car, your driving habits, demographic factors and the coverages, limits and deductibles you choose. These factors may include things such as your age, anti-theft features in your car and your driving record.

Is third party insurance increasing? ›

According to a gazette notification dated May 25 from the MoRTH, the annual rate of third-party insurance for private cars with up to 1,000 cc engine capacity has been increased to Rs 2,094 in 2022-23 from Rs 2,072 in 2019-20.

What is total premium in car insurance? ›

Your car insurance premium is the specific amount of money you pay a company to provide insurance protection for yourself and your vehicle.

What is Part A and Part B premium in car insurance? ›

Part A in Car Insurance policy means any person or organization legally responsible for the actions of an insured resulting from the use of motor/vehicles not owned by the insured. Part B in car insurance policy includes medical payment coverages or medical expenses that are covered at the time of vehicle accident.

Why would an insurance company come to your house? ›

Having the insurance company come take pictures or inspect your house is a good thing. They are looking for hazards that could cause a claim or even a lawsuit. The purpose is to protect you better and save you hassle & money in the long run.

Does leaving window open invalidate insurance? ›

Leaving windows opened or unlocked

If there is no evidence of forced entry into your home, your insurer has every right to refuse to pay your claim.

Will insurance pay if door is unlocked? ›

Key points. Your home insurance will be invalid if: You give dishonest information about your home and situation when you buy the cover. Your home isn't secure, with doors and windows left unlocked.

How long does an insurance company have to investigate a claim UK? ›

A response to this must be provided to the claimant solicitor within 21 days. At this point a defendant insurer has a period of 3 months to properly investigate the allegations made in the claim and then respond to the claimant solicitor.

How long do home insurance claims stay on record? ›

A: Homeowners insurance claims typically stay on a national property claim database called the Comprehensive Loss Underwriting Exchange (CLUE) for five to seven years.

How can I check my home insurance claims history? ›

To check your home insurance claim history, start by asking your insurance company to provide a copy of their records. You can also order a CLUE report, which stands for Comprehensive Loss Underwriting Exchange. This document includes past claims, damages, and repairs under your policy.

Is it illegal to not give insurance details after an accident? ›

Is It Illegal to Not Exchange Details After an Accident? Under the Road Traffic Act (1988), you have a legal requirement to give out your name and address to “anyone with reasonable grounds to be asking for those details.” That includes any other drivers involved in the accident. And the same laws apply to them.

What is a Stage 3 hearing? ›

This stage involves obtaining evidence to support the compensation claim, negotiations, and settlement if possible. Stage 3. This is laid out in the Civil Procedure Rules Practice Direction 8B. It involves issuing proceedings, filing evidence at court, and getting a judge to value the claim.

Why is the other insurance company calling me? ›

It is all about the money. One of the main reasons the other driver's insurance company calls you is to try to trick you into providing evidence that the accident was your fault, that any injuries you may have suffered were minor or that you did not have any injuries at all.

How much does home insurance go up after a claim UK? ›

Making a single home insurance claim can drive up the cost of a policy by more than 50%. Home insurance customers who have made one claim face paying 57% or £91 more on average than those who have not claimed, according to analysis published by Which?

Is it better to go through insurance or pay out of pocket? ›

If the cost to repair your car will cost less than your deductible, or even just slightly more, you should handle the repairs out of pocket. For example, if the damage to your car costs $300 to fix and the deductible is $200, you would save $100 by filing a claim.

How does no claims protection work? ›

No claim discount (NCD) protection is an optional cover which protects your NCD from one "at fault" claim every year. It does not protect the overall price of your insurance policy, but does guarantee that your premium won't increase next year as a result of a claim.

Is it worth protecting no claims on home insurance? ›

The longer you go without claiming on your home insurance, the bigger the discount you could get. Typically you get up to a maximum of 4 or 5 consecutive years' worth of NCB. For example, you could get a 30% discount after going 1 year without claiming, rising to as much 70% for 5 years.

Is it worth paying for no claims discount protection? ›

Is it worth protecting no claims? If you have a big discount you've built up, say 50% for example, you might want to consider paying for no claims protection. This is because if you make a claim, you could lose anything you've built up already. But if you've paid for the extra, it should be protected.

Is it worth getting no claims protection? ›

If you have five years' no claims discount, it will significantly cut the cost of your car insurance. You could lose all that for just one accident. You would also normally lose your discount for being in an accident with an uninsured driver, if you had to make a claim on your own insurance.

Do insurance companies always investigate claims? ›

Short answer: Yes, insurance companies conduct extensive investigations to avoid paying large claims. If someone else's negligence injures you, you can try to recover damages. The first step usually involves filing a claim with the at-fault party's insurance company.

What questions do insurance investigators ask? ›

Questions Insurance Adjusters Commonly Ask in Recorded Statements
  • What is your full name?
  • Are you aware that this interview is being recorded?
  • Do I have your permission to record your statement?
  • Can I share the information we discuss with another adjuster?
  • What is your address, telephone number, and date of birth?
7 Mar 2019

What does it mean when your insurance claim is under investigation? ›

This means you may need to answer more questions about your injuries, provide (or authorize access to) medical records, and obtain a copy of the police report for the adjuster. Then the insurance adjuster will likely talk to other individuals involved in the accident, and any witnesses.

Why has house insurance gone up so much in 2022? ›

New FCA rules that came into force in January 2022 to tackle the practice of 'price walking' have instigated the biggest monthly jump in home and motor insurance premiums in over eight years, according to market insight firm Consumer Intelligence.

Who is best home insurer in UK? ›

  1. 1 . Admiral. — Best Overall. ...
  2. 2 . Homeprotect. — Best For Non-Standard Cover. ...
  3. 3 . The AA. — Best For Premium Cover. ...
  4. 4 . MORE THAN. — Best For Comprehensive Cover. ...
  5. 5 . Swinton. — Best For Add-Ons. ...
  6. 6 . John Lewis Finance. — Best for Flexible Cover. ...
  7. 7 . Aviva. — Best For Customer Satisfaction. ...
  8. 8 . So-Sure. — Best For Contents Insurance.

Who is the best car insurer in the UK? ›

Top 10 car insurance companies in the UK
  • Admiral.
  • Aviva.
  • John Lewis Finance.
  • Hastings.
  • Churchill.
  • CSIS.
  • Age Co.
  • Dial Direct.
26 Aug 2021

At what age does insurance go down UK? ›

Age and car insurance

As a general rule of thumb, you can expect to pay the most for your car insurance when you're under 25. Once people are over 25, they tend to find that the cost of their car insurance starts to fall. The price usually declines gradually between the ages of 25 and 60.

How much has homeowners insurance increased 2022? ›

Based on S&P data from January 1, 2022 to May 18, 2022, home insurance companies have been approved for rate increases in almost every state, with an average rate increase of 4.48%.

How much does home insurance cost on average UK? ›

With the average UK household owning £35,000 of stuff, protecting it is important and it might be cheaper than you think. The average combined home and contents insurance policy costs £140 a year in 2021, according to Money Supermarket (Opens in a new window). That's just £2.70 a week.

How much is home insurance a month UK? ›

How Much Does House Insurance Cost a Month? In the UK, the average monthly payment for buildings & contents insurance is around £28.87 per month; monthly payments end up costing around 9% more than paying upfront.

Who is the biggest home insurer in the UK? ›

Top UK insurance companies of 2022 based on market cap
  1. Prudential plc.
  2. Aviva plc. ...
  3. Legal & General. ...
  4. Admiral Group. ...
  5. Phoenix Group. Market capitalization (as of March 31, 2022): £6.3 billion ($7.8 billion) ...
  6. Direct Line Insurance Group. Market capitalization (as of March 31, 2022): £3.7 billion ($4.6 billion) ...
23 May 2022

Are leaks covered by home insurance? ›

Homeowners insurance may help cover damage caused by leaking plumbing if the leak is sudden and accidental, such as if a washing machine supply hose suddenly breaks or a pipe bursts. However, homeowners insurance does not cover damage resulting from poor maintenance.

Which home insurance company has the best customer service? ›

Best Overall: USAA

USAA is consistently ranked highest across customer reviews and third-party organizations. Its low rates, top marks for customer satisfaction and large market share solidify USAA's top spot.

Who is the number 1 insurance company in the UK? ›

Admiral Group

The Admiral Group is the largest auto insurance company in the UK with 14% of the motor insurance market, underwriting policies through their Admiral, Bell, Diamond, elephant.co.uk and Gladiator brands.

What is the lowest car insurance group? ›

Every car belongs to one of 50 car insurance groups, which are used by insurers to help set the premium you pay. Cars in group one are the cheapest to insure, while those in group 50 are the most expensive – and the more powerful and luxurious your car, the higher the group it will be in.

Which type of car insurance is cheapest? ›

Minimum liability insurance is the cheapest type of car insurance and lowest level of coverage required by most states. Additionally, most car insurance quotes also include full coverage quotes for those who need a higher level of protection.

What age is car insurance cheapest? ›

Drivers see their car insurance premiums start to go down around age 20, with a big drop coming around age 25. Rates tend to level out for decades beginning around age 35. Once you're past 65 years old, however, age tends to affect driving capability.

What age group has the highest insurance? ›

Average car insurance rates by age group range from $716 per year for 45-year-old drivers to $3,343 per year for drivers who are 16 years old. Car insurance rates are highest for teens and seniors, on average, because they are considered high-risk due to an increased likelihood of accidents and expensive claims.

How much does car insurance go down after 1 year no claims? ›

The amount of discount earned increases with each year of claim-free driving. So after one year you might get 30%, with the percentage increasing each year until you get 70% NCD after five years. Most firms offer a maximum NCD of 70%, although some offer 75% or 80%.

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