Car Insurance

Your car insurance price explained

How we calculate the premium you pay

How insurance works

To work out the price of your insurance, we weigh up several factors. Some factors are specific to you, including the chances of you making a claim. Other factors are to do with the world around you and what’s happening in the insurance market. 

Every customer pays into a central pot, and if you make a claim we pay it out of that pot. If lots of people claim at once, the pot has to go further, which means prices go up. But whatever happens, we constantly review the way we calculate the cost of car insurance so we can make sure you get the best price.

On this page, we’ve explained these factors and how they affect your price.


Costs breakdown

At a glance, where your money goes 1.

In 2018, the average car-insurance price increased. Here’s a breakdown to help explain what makes up the average price.

  • 75% Claims costs – the amount Aviva pay out in claims
  • 11% As a result of Insurance Premium Tax
  • 8% The profit that Aviva makes
  • 6% Operating and marketing costs, such as contact centres and online support

Claim costs count for the majority of our outlays. Here’s a breakdown of the cost of car-insurance claims.

  • 42% Third-party personal injury eg. whiplash claims
  • 26% Own car damage
  • 24% Third-party car damage
  • 6% Theft and fire
  • 2% Windscreen damage

Save money on your car insurance

Aviva MultiCar

  • Save 10% when you add extra cars. Discount doesn't apply to extra protection
  • Up to 5 vehicles on one policy. All cars must be registered at the same address
  • You can buy cover for two cars online. To insure three or more, call us on 0800 046 2722

How you affect your price

How far you drive

If you’re on the road more, you’re more likely to make a claim, as you’ll be driving more miles. Also, the nature of your journeys could affect your price. For example, if you use your car to commute to work when traffic is busy, insuring your car may cost more than if you only used your car socially. 

Where you live

When working out your premium, we’ll factor in your postcode and individual address. We’ll look at claims, traffic, theft and malicious damage in your neighbourhood. More accidents, so more claims, in a given area, may drive up car-insurance costs inside it.

The car you drive

The kind of car you drive could lead to a different price. We look at all cars individually, using our industry experience and looking at the make, model, the age of the car, fuel type, transmission and engine size to determine the price you pay.

Protectable no-claim discount

If you don’t claim, that tells us you’re a safer driver, and we factor that in to your price. For an extra cost, you can protect your no-claim discount, and reduce the impact a future claim could have on your next renewal price. 


Any previous claims

When setting your premium, we look at your claims’ history, including accidents and/or claims in the last 4 years.

Any driving convictions

To help decide your price, we consider any driving convictions you may have. Our experience shows that those with driving convictions are more likely to claim, so their prices are likely to be higher.

Who’ll drive your car

When working out your price we consider the driver's age, and any convictions or claims. Statistics show younger drivers are a higher risk, and so are likely to cost more to insure.

How events affect your price

Severe weather

Long cold or wet spells can increase the amount and severity of claims. Ice and water can lead to more accidents as people don't always change their driving behaviour for the conditons. Like other insureres, we reguarly review the level of future claims costs resulting from severe weather. 

More expensive repair costs

It’s getting more expensive to buy car parts and pay for repairs. This increases the cost of providing insurance and the price you pay. 

Changing claims market

For example, numbers of personal-injury claims, including whiplash, are much higher in the last decade, driving up the cost of car insurance market-wide. We reckon how much we’re likely to pay in future claims, and factor this into customers’ prices. Third-party claims also have an effect.

Changes in the law

Changes in Government laws and industry regulations can affect prices. For example, in 2015 the Government proposed to remove compensation for minor whiplash, and also lawyers from minor-injury claims. In 2017, we passed on all savings from these reforms to Aviva customers. 

Numbers of claims in the market

More claims can increase our costs, and lead to higher prices. We’re very open and transparent about our customers’ claims experience. As shown on our website, our average review left by customers buying or claiming on our car insurance was 4.6 out of 5 (as at 1 December 2019).

Rising taxes and other costs

For example, in 2017, the Government increased Insurance Premium Tax from 10% to 12%, forcing up prices across the market. Your premium includes costs for current customer services, such as contact centres and online support, and for investing in future products and services.

Check your Aviva products with MyAviva

Log in or register for MyAviva to see your policy details and renewal premium.