Weird reasons for car cover to cost you more

Simply moving to a newly built home could result in you paying a higher premium. Sam Meadows explains

The way car insurers calculate your premiums can be infuriating. Many drivers will have seen their premium soar for no reason other than the way they filled in the form or some obscure factor in their personal circumstances – often beyond their control.

This is mainly down to the way insurers calculate risk. Computer algorithms will determine the likelihood of you making a claim based purely on the information you provide. This can lead to absurd situations such as the case of a woman deemed a more risky proposition because her car was crashed into and written off while it was parked.

Here Telegraph Money details five unusual reasons your car insurance premium might increase. in front of you at a junction and causes a crash, insurance companies will accept that it was not your fault. But they may still inflate your premium when you come to renew as, statistically, you are more likely to be in another crash.

One expert said: “It may be statistically true that drivers who have been involved in an accident are more likely to be involved in another – even when it wasn’t their fault – but it’s simply not a fair policy to charge people more in those circumstances.

“If someone jumps a light and smashes into you, there’s no good reason why you should have to pay more for your insurance as a result. This kind of data-driven unfair pricing is what gives insurers such a bad name.”

Mary Mangan, 53, found herself in a bizarre bind with her insurance company when her car was written off while she wasn’t even in it.

Her car was parked on the road outside her home when a van driver lost control and hit both her vehicle and her neighbour’s, writing them off. When she came to renew, her premium had increased by more than £100.

She said: “How can that be the case if I wasn’t even in the car?” Another factor that insurers will use when determining your premium is your address. Some areas are clearly more risky than others, but moving to a newly built house could also cost you because it may not appear on the insurer’s database.

Doug Welch was one victim. After moving to a newly built house in Northamptonshire he was shocked to find that the renewal premium quoted by Saga, his insurer, was £1,117 – almost treble the £464 he previously paid.

Saga said it got its information on addresses from credit reference agencies. The small amount of data on the area meant it came back with a poor rating, leading the company’s underwriters to increase the premium heavily. Saga said that it had not passed Something as simple as the way you describe your job can make a huge difference to your premium. Insuring the same car in the same postcode, but describing your job in a different way, can mean you pay hundreds of pounds more.

Analysis by Telegraph Money found that a woman in her 40s who described herself as a housewife rather than unemployed could save almost £200.

With all other variables the same, the cheapest quote offered when she described herself as unemployed was £807, but when she described herself as a housewife the cost fell to £622. The two quotes were from the same insurer.

www.telegraph.co.uk/funds