Rising fuel prices and the cost of basic groceries are compelling UK residents to take up a side gig. Second jobs or side hustles have become the norm as people try to make ends meet.
As a keen hypermiler you understand the savings that are made through fuel-efficient driving techniques. Why not do the same with car insurance premiums? Everyone wants to save money where possible, and car insurance is an expense for every driver.
Yet, many people don’t understand the factors that make up their insurance pricing, or how to lower their premiums. If you’re keen on maximising fuel efficiency and saving petrol, then why not look a bit deeper into your car insurance?
Why is your UK car insurance so high?
The average yearly car insurance premium was £456 in 2022 according to Go Compare. However, younger drivers looking for comprehensive cover would have faced a bill of £905.
Factors such as age play a big part in car insurance generally. There are other metrics in play too as you will see. There are also many different types of policy.
For instance, taxi owners would benefit from smart car insurance aimed at private hire drivers. Some insurance policies reward vehicle owners for good driving. So, your car insurance might be high because you have the wrong policy – or your insurer isn’t rewarding you for your careful driving habits.
Here’s why your insurance might be high, and what you can do to lower it.
1 Because you’re not using telematics
There are plenty of ways to maximise fuel efficiency, and some driving techniques help. With telematics-based insurance, your careful driving would affect the price of your premiums. So, the careful driving you employ in hypermiling would be reflected in your insurance premiums.
Standard car insurance rewards no claims and is based on a number of metrics such as age, and location. But, usage-based, or telematics insurance looks at driving habits and different metrics altogether.
Harsh braking and speeding would indicate risky driving behaviour, while keeping within speed limits, and careful cornering would point toward safe driving habits. This type of insurance rewards good drivers instead of judging them solely on age and other measurements.
2 Because you’re using the wrong insurance company
Comparison sites are popular for all manner of consumables. You may compare motor cars online, and electronics too. Comparing insurance companies is a simple way to look at different types of cover side by side.
But, technology is also helping drivers to get lower insurance premiums. Is your insurance provider using mobile apps or offering things such as usage-based insurance? Some UK car insurers are using apps to help car owners cut up to 40% off their premiums. Some even give a discount as soon as the app is installed.
Again, these apps score driver’s behaviours. And a high score means a lower premium.
3 Because of the type of insurance
Sometimes, car insurance policies seem high due to the cover they provide. Not everyone requires personal car insurance, Uber drivers and couriers need a different type of cover.
The UK private motor insurance market was worth £12.2 billion in 2021. The industry now offers a huge range of policies to protect private hire taxi drivers and delivery drivers. These types of policies are higher than regular car insurance because they present a bigger risk.
However, private hire and Uber drivers can get specialised policies that suit their working hours and again reward good driving habits.
What are the factors that affect the cost of regular car insurance?
So, usage-based insurance or telematics works by recording certain signals when the car is being driven. The data that is transmitted includes such things as speed, location, hours of driving, and how many miles. This data is then analysed to calculate what kind of risk the driver presents.
Yet, with traditional car insurance, none of these metrics is considered. Regular car insurance providers that don’t use telematics rely on other factors to determine what premiums to charge.
A big reason why your car insurance might be high is due to you using old-fashioned car insurers. Here are some of the factors that insurance providers will use when calculating your premium.
1 Age and years driving
Age plays a significant factor in car insurance as does the number of years of experience the driver has. Young drivers get penalised due to their age. So, instead of good driving being rewarded regardless of age, young drivers face far higher insurance premiums instead.
Telematics insurance helps drivers to improve by pointing out where their weak points are. In theory, young drivers could benefit from usage-based insurance financially but also by becoming safer drivers early on.
2 Claims history and driving record
Out of all the good tips for hypermiling, defensive driving is up there with the best. This type of driving helps usage-based insurance policyholders to reduce their premiums.
But, with regular car insurance, premiums only drop if there are never any claims or accidents.
3 Where the car is parked and your residence
Areas that statistically have higher crime rates will have higher insurance premiums. Parking on the road at night may also affect the cost of car insurance.
4 Model of car and engine size
Hybrids can cost more to insure. Therefore, hybrid hypermiling techniques may be useful for negating the higher premiums these cars attract. Bigger engine sizes will also see premiums go up. The more powerful a car is, the higher the insurance will be.
This type of insurance doesn’t take into account how safe the driver’s road habits might be, just the engine size. Telematics-based insurance would help careful drivers if they were paying more for a hybrid or larger engine.
5 Your occupation
Your job will affect the cost of car insurance. Even if you only drive to and from work, your occupation will be a factor.
Some occupations involve driving, and these require different types of cover. There are specialised insurance policies for Uber drivers and taxi owners for instance. These insurance policies are good for helping people in some occupations be fully protected along with their passengers.
Without the correct insurance for your occupation your insurance could be void. PCO cars with insurance are not legally allowed to take fares, so make sure you have the correct policy.
6 Car modifications
Customisations and modifications might help a car to run more efficiently, but others will impact insurance premiums. Adding a turbo for example would see higher insurance premiums.
7 Security systems and anti-theft devices
Car alarms and immobilisers are two great forms of defence in the fight against car theft. Quite rightly, car owners with these fitted should see reduced insurance premiums. Last year, there were 31,017 car thefts in London with 87.2% going unsolved.
Installing a car security system and parking off-road should help to see lower insurance costs.
8 Your stability
If you’re a new driver this factor might surprise you. Your marital status and even your credit score may affect your insurance premiums. Married couples get cheaper car insurance because statistically speaking, they are less likely to make a claim.
In some countries, education plays a part in insurance premiums and students in the UK pay more than people in employment.
Summary
If your car insurance is too high then maybe it’s time to swap providers. And, if you know you are a safe driver then you should be rewarded for it. Usage-based insurance doesn’t completely rely on traditional metrics such as age and marital status. Instead, it allows drivers to prove that they are safe and present a low risk to insurers.
Private hire and delivery drivers also benefit from telematics as there are policies specifically aimed toward these occupations. Private hire drivers often face high premiums but smart insurance apps help reduce costs through safe driving.
