Insurance claims up premiums by almost £200, study suggests

Making a claim on your car insurance can increase your premium by an average of almost £200, according to new research. Price comparison site CompareTheMarket.com found the average insurance premium shot up by £184 for those who had made a claim in the past year.

The company’s analysis showed the average premium for a driver who has made a claim in the past year currently stands at £844. In comparison, drivers who have not made a claim in the past five years will pay an average of £660.

However, the research revealed the cost of insurance will usually fall quickly if a motorist does not submit any new claims after their initial incident. The study showed the average premium for a driver that made a claim between one and two years ago is now £705 – a £139 reduction and just £45 more than the average premium for drivers who have not made a claim.

These figures are averages, though, and CompareTheMarket.com says the impact of making a claim will vary “significantly” depending on whether the driver was at fault for the accident. The average premium for a driver who was at fault for an accident in the past five years is £742, but if another driver was to blame then, the average premium is £640. Intriguingly, that’s lower than the average for drivers who have not made a claim.

Perhaps unsurprisingly, the research showed the most serious accidents have the greatest effect on drivers’ premiums. The average cost of insurance for a driver who has written off their car in an incident in the past five years is £748, while the average premium for a driver who has had their car stolen in the last five years is a massive £836.

More on car insurance in the UK:

UK: Average insurance premium drops to six-year low in spring 2021

UK: Half of drivers think they're paying too much for insurance during Covid

“Motorists need to be careful if they plan on driving more often now travel curbs have been lifted,” said Dan Hutson, the head of motor insurance at CompareTheMarket.com. “Our figures show how costly it can be to renew your car insurance if you’ve recently made a claim. Whether an accident was your fault or not, making a claim will usually lead to an increase in your premium when you renew.

“If you’ve had an accident you don’t have to claim on your insurance. However, you do need to tell your insurer about the incident, even if you were not at fault. It may be tempting to keep quiet, especially if you think it might save you from a price hike. But if your insurer finds out later from the other driver or another party, then they could refuse to honour your policy for failing to report it. Any increase in your premium will usually be much cheaper than the thousands of pounds it could cost to cover any repairs from an accident out of your own pocket.”