How do car insurance companies work out how much people pay?

[ChildrenOfTheDamned]

DH's car insurance is £1332 per year, we pay it monthly. He's been driving for 8 years, 3 points on his licence for speeding which he got 4 years ago. No claims, although haven't carried any no claims bonuses over as we usually change every year and go with the cheapest quote. Car is 12 years old, no one else on his insurance.

DSD just got car insurance after getting it free for the first year with her new car. She's 22, car is 1 year old, she has no points, but does have a claim as someone shunted into the back of her pushing her into the back of someone else's car earlier this year. Her car insurance is £1350. She's been driving for 3 years, and has DH as a named driver on her insurance.

The only difference could be our postcodes I suppose, we live in an awful area with a high crime rate and she lives in a decent area with not as much crime. We both have drives.

I don't get it. I thought that ours would be much cheaper as DH is older, been driving longer and the car is older. I'm glad that she's managed to get cheap (well sort of) car insurance, but it makes me think DH's should be much cheaper?

Post codes do make a stupid difference, my car insurance is less than £300 a year.

Makes no sense as several cars have been stolen from houses near here and our narrow lanes are 100% blind bends, so just as likely to bend cars as in a city.

I

It is worked out via a complicated algorithm based on variables including but not exclusively:
Age
Car - inc type, engine, modifications, how boy racer it is...
Where kept - drive, postcode etc
Driver - age, claims, points

It will be the postcode. Our car insurance is 1k more expensive in our current postcode than it was when DP lived at home with his parents. It's crazy!

Post code is one thing they take into account and it can make a big difference.
I don't understand what you have said about no claims bonus. You do know you can take your no claims bonus to a new insurer each year don't you?

by very complicated algorithm's which take into account lots of factors including all the factors you are asked when applying , but also the calculated statistical likelihood of you making a claim based on all the previous data.

Insurance companies have access to data of all claims made across the UK

Surely the big difference is the 3 points on DH's licence - insurance companies do not like these!
Presumably you have tried all the comparison sites and tried putting a responsible second driver on the policy. If not give them a whirl - and good luck!

Why does he not carry across his no claims bonus?

We started off in 2011 afresh (as we had lived overseas) and have seen our insurance go down every year due to the no claims bonus accumulated. (I also have 3 points on my licence)

This year, our quote was around 590 including road side assistance and recovery.

Having a second driver on a policy can bring it down significantly.

I'm not surprised your DH's insurance is high if you haven't been claiming your no-claims - all you need to do is get your previous insurer to certify that you made no claims through them and the premium goes down - you don't have to stay with the same insurer. He is choosing to pay a "new driver" premium every year by not doing this!

Has he really not been carrying over his no claims bonus? Five years' worth will reduce your premium by up to 70%

profession is a big factor.

I'm a journalist. insurers hate journalists (along with everyone else!) so my insurance is always high

He needs to carry over his no claims bonus, we change insurer every time too, you just have to provide proof of no claims from the previous insurer. It makes a huge difference!

Being ultra-specific about profession can help too ... for example "working in IT" can take you from very high risk to very low risk groups depending on whether it's managerial, technical, operational, administrative, ancillary, implementation, support, sales, business analysis ...

I'll leave it as an exercise for the reader to place those in ascending order

Definitely postcode. And changing insurance every year for the cheapest deal available - use all search engines and then clear cookies and look at other quotes direct from insurers.

I have 3 years no claims, live in very low crime south norfolk and drive a 2001 renault and my insurance is £260 a year.

Postcodes make a huge difference. I pay £92 a year for insurance.

OP You need to clarify this No Claims Bonus business. As PP have said, new insurers honour NCB earned in previous years with different insurers. You're potentially missing out on a significant reduction in premium here.

Older cars do not = cheaper insurance. Its more to do with engine performance.

Do you have a license? It might reduce his premium if you are added as a named driver. Having me as a named driver on DH's policy reduces it somewhat.

Soon you'll be asked to enter your driver number, so clearing cookies won't work ...

Sweetheart, I suspect your husband has been paying waaaaaay over the odds for quite a few years.

We insure two cars (one high level and sporty, the other a little 1200 brand new run around) and it's 'just' over £300 a year for both (NOT each) - which includes business use.

ALWAYS use your no claims sweetie and, if the premium price is acceptable, pay to protect them too.

Get thee to a price comparison website and then look at those not included. You will be very surprised indeed!

ANONYMOUS INTERNET SEARCHING IS YOUR FRIEND
go to google : open an "anonymous browsing" window
go to your insurer's website
put in the details from DHs renewal
get a quote

when you have picked your jaw up off the floor at how much cheaper it will be, phone them and make them match the price

YY to engine performance being more important than age; anything with ‘sport’ in the name will cost you more than the same (basic) car. They also look at how attractive that make/model is to thieves. You occasionally see items in the newspapers about “most stolen car in the UK”, and it’s these types of stats Insurers use in their algorithms to come up with a price.

Also, if you’re using price comparison sites to pick a policy make sure you toggle between pay monthly/yearly direct debits. Often the cheapest policy which you pay for in a one-er will be exponentially dearer if you choose to pay for it over the course of twelve months.

You don't even need to do that, really. We get a ridiculous quote for renewal every year from Admiral. I just run a new quote on their site which is always a great deal lower then ring them and they honour it. This year our renewal quote was £800 ish and they were happy to honour the £350 or so of their own online quote. Less than HALF. I couldn't even be arsed to run any other price comparisons. My time is worth more than the additional

(you don't even need to do an anonymous search I mean)

Your dh should try adding his dd or a parent/sibling as a named driver to see if it comes down.

Mine this year should be £140 with cashback from topcashback. I have 15,000 mileage, legal cover, 3 points on my licence & a non fault accident.

I think they use a random number generator.

Having my wife as a second driver on mine brings my insurance down even though she's only been driving 5 years and I've been driving for 14 (both clean licences with no claims).

A few years back my dad tested adding me to his and quote went up, so tested adding my younger brother and the quote went up, so finally tested adding both of us and quote went down to less than him on his own.

All very bizarre.

he should have 8 years NCD and you should be paying around £400.

It sounds like you have thrown away thousands of pounds because you couldn't be bothered to do your NCD.

After 8 years, the NCD should be 65%.

The best thing about reaching the grand old age of 50 is car insurance
I got car insurance for the first time last year, I was allowed no claims for years of being a named driver
Just under £200 for fully comp
I am at how much people have to pay, I thought it had dropped price this year?