How is car insurance calculated?

Posted by mustard.co.uk on September 15th, 2015 and last updated on February 1st, 2021

Find out what affects the cost of your premium and search for deals with mustard.co.uk’s car insurance calculator.

If you drive a car, you’ll need car insurance by law – but that doesn’t mean you should pay over the odds for it. Using a car insurance calculator can help you compare different quotes, so you can find the cover you need, at a price that fits your budget.

How to calculate car insurance

Insurance is all about risk – the more likely you are to have an accident and make a claim, the higher your premium is likely to be. To work out that risk, insurers take into account a whole host of factors, including:

 

Your Age

If you’re young in the eyes of insurers (aged 16-24) you will always pay more for your insurance. That’s based on risk, which is based on accident data that shows that young motorists are more likely to be involved in an accident and make a claim than any other age bracket. That being said – it doesn’t mean you should pay more than you have to, if you’re a young driver. So, take a quick look at our handy guide to cheap car insurance for young drivers.

The other side of the coin is that the older you are, the lower your insurance premium should be, generally.

Your Address

Where you live and where your car lives will influence your insurance price because insurers use crime statistics to decide how much they charge.

If you’re fortunate enough to live in an area with low vehicle crime, your insurance premium should be lower than if you lived in a postcode where vehicle theft and crime is high.

Your Job

The job you do can have a surprising influence on the cost of cover because some careers are considered riskier than others (in the eyes of insurers). For example, professional sports players pay considerably more for car insurance compared to nurses, magistrates, and headteachers.

Where your vehicle is kept and security

If you park your car on a street, without an immobiliser or lock, you will pay more than somebody who keeps theirs locked in a garage.

Insurers are thorough and will have a list of approved locks and security measures, if you have these in place your insurance should reduce.

Renaultsport Twingo in white with black alloys

Your vehicle and its insurance group

Regardless of what type of car you have, its value, desirability and power will have a massive impact on how much you pay for your insurance.

A top of the range £100,000 super car will cost more to insure than a low emission £7,000 hatchback.

That’s because it will be more powerful and more expensive, meaning it’s going to be more expensive to repair or replace following a claim. It’s also more desirable to thieves.

At the same time, an old car may not be as cheap to insure as you think because it’s arguably easier to steal.

Whatever car you drive, it will have an insurance group which also influences your insurance costs. The lower the number of the group your car is in, the less you have to pay.

Type of cover

There are different types and levels of car insurance and some cover you in more eventualities than others. The type of policy you choose will impact what you pay. If you decided to add on extra features to boost the level of protection, you can expect to pay more than a policy without any additions.

Comprehensive insurance covers you for pretty much every eventuality and costs more because there are more potential times that your insurer could pay out in the event of a claim.

Third Party Fire and Theft cover is the middle form of car insurance for UK drivers.

Third Party Only cover is normally cheaper because there are fewer opportunities for you to make a claim.

Use and mileage

If you use your car for business as well as social, you will pay more than somebody who only uses their car for social use.

That’s because you’re likely to be on the road during heavier traffic more than somebody who drives socially.

In the same way, the higher your annual mileage, the higher your premium, again because you’re on the road more and therefore more at risk than somebody who drives fewer miles.

Volkswagen Scirocco in white

Excess

There are two types of excess on car insurance policies: voluntary and compulsory.

Your compulsory excess is decided by your insurer and must be paid in the event of a claim.

Your voluntary excess is decided on by you and your insurer, essentially it can be as high or as low as you want but the higher your voluntary excess the lower your premium, usually.

No Claims and a clean licence

If you have a clean driving licence and a No Claims Bonus you will pay less for your insurance than somebody who has made lots of claims or has convictions.

Other drivers or riders

Having other named drivers or riders on your policy can make your insurance more expensive sometimes.

Length of your policy

Short-term policies will be more expensive per day than standard 12-month policies.

 

How do I get cheap car insurance?

At mustard.co.uk, you can calculate the cost of car insurance by filling in our online quote form. The information you provide will generate a range of quotes from leading UK insurers, so you can see who has the cheapest car insurance. 

The answers you provide on our online form help determine the quotes you see. Changing those answers can affect the price of premiums. 

There are, of course factors you can’t change (like your age or address), but other features (like the level of cover you choose) can make a considerable difference. To find out how much of a difference, you can toggle between third-party only, third-party, fire and theft, and comprehensive cover. 

You can also try different variations on your job title to see how this affects what you pay – for example teacher vs. headteacher or nurse vs. matron. Needless to say, whatever you choose still has to be an accurate description of your job. If it isn’t, you risk invalidating your policy which means your insurer can refuse to pay out. 

Changing the excess can also influence the cost of car insurance, for instance, a higher voluntary excess can result in a lower overall premium. If you do this, remember that the excess still needs to be affordable because it has to be paid for a claim to go ahead. 

That’s why it’s important to search and compare as many prices as possible to make sure you get the cheapest quotes and a policy that suits you.

How can our car insurance calculator save you money?

Our quote form can help you compare prices quickly and easily, giving you clarity over what affects the cost of cover. You can then decide which policy offers you the best value for money based on your needs and your budget. 

 

Who is mustard?

We are experts in insurance comparison, dedicated to helping you compare quotes online quickly and easily.

We search quotes from some of the UK’s leading insurance providers to help you find the right policy for you at a price to suit your budget.

Don’t just take our word for it, take a look at some of our car insurance comparison reviews.

Insurance as individual as you are

Compare Car Insurance Quotes