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 many factors. Some of these are specific to you, whereas others are to do with the world around you and what’s happening in the insurance market.

Everyone who buys insurance pays into a central pot and, if you make a claim, we pay it out of that pot. If the numbers and costs of claims increase, the pot needs to go further, which means prices can go up.

But whatever happens, we constantly review the way we calculate the cost of car insurance to make sure we offer you the most accurate price.

On this page, we’ve explained some of the factors which can affect your price.

Your car insurance renewal

Before your current policy comes to an end, we’ll send you a renewal invitation Footnote [1]. It will show two prices – last year’s price and a price for continuing cover for another year.

As you’re already a customer with us, your price to renew your cover will be the same as or lower than the equivalent price for a new customer.

Over the past year, insurance prices have gone up across the UK. Various factors have played a role in this, such as a shortage of parts, materials, and workers, which has led to price increases. This coupled with the European energy crisis has driven up inflation in the UK.

If the specific cover you have with us isn’t available to new customers any more, we’ll compare your renewal price against the new customer price of the policy which most closely matches yours.

Frequently asked questions

Why isn't last year's price what I paid?

I haven’t made any changes, why has my premium changed?

Does this price include my no claim discount?

Why have I found a better price from you on a price comparison website?

Why does it cost more to pay monthly for insurance?

How events affect your car insurance price

Total number of claims

Since 2013, car thefts have increased 55% Footnote [2], as have parts thefts. Wing mirrors and wheels have risen in value as supply has reduced. In light of this crime wave, and with fewer replacement parts available, it's pricier to settle customers' claims. In turn, this has affected the price of policies.

More expensive repair costs

A combination of less skilled workers Footnote [3], higher gas and electric prices, and problems finding replacement parts Footnote [4] has pushed up the price of fixing vehicles over the last few years.

2022 was a bumper year for electric car sales in the UK, with December seeing the biggest spike Footnote [5]. It can be unusually expensive to fix and replace specialist parts since they require specialised mechanics. This has also had a knock-on effect for the customers’ price.

Changing claims market

Numbers of personal-injury claims, such as whiplash, have increased over the last decade, driving up the cost of car insurance for everyone. We work hard to predict how much we’re likely to pay in future claims, and factor this into customers’ prices. Third-party claims also have an effect.

Energy prices

Since the Ukraine war started, gas and electricity prices have soared by over 128% Footnote [6] Customers' insurance rates have increased to reflect the steep hikes in the costs of keeping vehicle-related businesses afloat, such as repair shops.

Longer time to repair vehicles

There's no car repair without staff and parts, and they're both in higher demand than usual. As a result of COVID and Brexit, there's a shortage of specialist skills Footnote [3], while imported parts (such as microchips) are harder to get hold of Footnote [4]. Providing courtesy cars for longer periods of time increases costs as well.

Severe weather

In 2022, we saw extreme weather conditions at both ends of the thermometer Footnote [7]. The record-breaking heat waves, thunderstorms, heavy rain, and snow have all led to a rise the cost of covering your claims, and because of this, our prices are higher.

How you affect your car insurance price

We use hundreds of factors to figure out how much you should pay for your policy, and some are more directly related to you than others. They also help us understand whether you're likely to make a claim and how much it'll cost. When you first take out insurance these factors shape the price you pay, but tend to have less impact on renewal costs. These are the top considerations:

Where you live

Your postcode plays a part in how much your car insurance costs. For example, we take into account claims, traffic, theft, and deliberate damage. Your insurance rates may go up if your area has more accidents and claims.

Your age

Because there are a number of risks associated with ageing, we keep a close eye on claims statistics and apply age-related risk factors to your quote as well.

Your mileage

How far you drive can affect your price too. There’s not a simple formula here, but it can combine with other factors to build an overall picture of your risk.

The vehicle you drive

If you own an expensive car, it may cost more to repair, and it may be more likely to be stolen as well. The age of your car is also significant.

Who drives your car

You're not the only one who influences your insurance premium – any drivers you include on your policy can also affect it. For example, adding a teenage driver to your policy could mean your rates are much higher than if you just insure yourself.

Your driving history

It's more likely that customers with recent driving convictions and claims, especially in the last four years, will be involved in an accident or make a claim. Prices will reflect this.

How to manage your policy online

MyAviva is a secure online portal, where you’ll find all the details and documents for your car insurance policy, so you’ll always know where everything is. It’s also where you’ll make changes to your personal information or your policy. You can do this at any time through your laptop, tablet or mobile.

What you can do in MyAviva

  • Renew your car insurance policy
  • Update your details
  • Make changes to your policy 
  • View, download and print policy documents 

Save money on car insurance

Aviva Multi Car

  • Save 10% when you add extra cars. Discount doesn't apply to extra protection
  • Up to five 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*

*For our join protection, telephone calls may be recorded and/or monitored.