Why has the price of my insurance changed?

Written by Zego

Published on

Groceries, fuel, phone contracts, household bills, eating out; it seems like everything we spend our money on has become more expensive.

Rising inflation and the cost of living have pushed prices up across the UK, in fact across the whole of Europe. And that includes the amount we pay for motor insurance.

But beyond the economic factors, there are other things that can affect the price of your insurance. Let’s take a look at them here.

Why has the price of car insurance gone up?

Here’s a quick summary of what you need to know:

  • The UK’s high inflation rate has increased the cost of living, impacting the prices of most goods and services.
  • Delays caused by Covid-19 have hit the motor industry hard, causing a shortage of vehicles and driving up prices for insurers.
  • The conflict in Ukraine has interrupted trade and supply chains across Europe, worsening these shortages and pushing prices even higher.
  • Expensive technology in modern cars has made it more costly to repair and replace vehicles following an accident.
  • If there have been changes since your last quote — say you’ve moved house, bought a new car or been involved in a traffic incident — your insurance renewal cost is likely to change, too.

Keep reading to learn more.

Problems on a global scale

Let’s face it, a lot has happened in the last couple of years. We emerged from a global pandemic into a different world, one with unstable financial markets and economies still in recovery.

Then the war in Ukraine started, throwing the country into turmoil and causing trade and supply issues across Europe and beyond.

And all the while, here in Britain, we’ve been adapting to life post-Brexit.

So how has all of this caused prices to increase?

Lockdown delays

During the pandemic, businesses and the transport industry ground to a halt. This included the factories that make semiconductor chips, and the supply chains that move them.

These chips are used to make lots of different products, including cars. In fact, there can be more than 40 semiconductors in a single vehicle. And they’re expensive — the chips and the technology that surrounds them can make up roughly a third of the cost of an average car.

The semiconductor shortage has caused some car manufacturing plants to temporarily close. This has led to delays in the delivery of new private and commercial vehicles, with a backlog of orders reaching back to 2021.

This shortage of new vehicles has driven up the market value of second hand cars, including hire cars and replacement vehicles used by insurers.

So if you’re involved in a collision and your car needs to be repaired or replaced, your insurer will cover the cost. As these costs have increased since the pandemic, so will the cost of your insurance.

The war in Ukraine

Since Ukraine was invaded in February 2022, the country and its people have endured devastating attacks. The conflict has been far-reaching, affecting supply chains and the economies of many European countries.

One product caught up in these supply chain issues is a harness used to hold electrical cabling together in certain models of car. Manufacturers like BMW, Audi and VW buy these harnesses from factories in Ukraine.


The parts aren’t expensive, but each one is completely bespoke to each car model. And in many cases, production can’t begin without them, so car plants have been forced to close across Europe.

This has led to further shortages in the delivery of new vehicles, helping to drive up prices across the motor industry.

The cost of new technology

The tech inside our cars has advanced at a fast rate. From light-detecting headlamps to keyless ignition, all of these modern additions make our cars better, smarter and more efficient. But they also come at a cost.

As the value of cars and their parts has increased, so has the cost of repairing or replacing them. And this cost gets passed along to your insurer following an insurance claim.

The growth of keyless entry cars has also seen a rise in the number of thefts, which only adds to the insurance risks and associated costs.


So while new technology is great on the road, it is having an affect on the price of your insurance.

Your risk factors as a driver

Beyond the global economy, there are reasons closer to home that might cause the price of your insurance to change.

The first thing to know is that motor insurance is based on risk. If an insurer thinks the risk of your car getting damaged or stolen is high, you’ll probably pay more than someone they consider to be low risk.

It’s good to know which risk factors can affect the price of your insurance. Here are some of the main ones.

Your driving history

If you’ve been involved in a road traffic accident since your last quote, you might see your renewal price go up.


Even if it wasn’t your fault, your insurer will need to consider any previous claims when calculating your risk as a driver.

Points on your licence

The same goes for points on your licence. The more you have, the more likely that your insurance cost will rise. Depending on the type of penalty, some points can stay on your licence for years.

If points do get added to your licence, be sure to declare them. Otherwise, your insurer might not be able to pay out if you make a claim

Your vehicle

If your car or van is worth a lot of money, you may end up paying a bit more for your insurance. That’s because it would cost your insurer more to repair or replace it if it got damaged.


Expensive vehicles are also more likely to get stolen, as thieves tend to target cars that are worth more. This increased insurance risk can add to your renewal quote.

The same goes for powerful vehicles. If your car has a large engine capacity, or has been modified to make it go faster, your insurer might think you’re more likely to be involved in a collision.

Where you live

Insurers use your postcode and where your vehicle is parked at night to help calculate your risk profile.

If there’s a high crime rate in your area, or your vehicle is parked on a busy street (as opposed to a locked garage), you may end up paying more for your insurance.

So if you move address before your renewal quote is due, always check to see how it will affect the price you pay.

Your age

Younger drivers tend to have the least experience on the road, so they usually carry the greatest risk of being involved in an incident. That’s why drivers under 25 tend to pay the most for car insurance.


Drivers in their 50s and 60s are usually considered the safest drivers, especially if they have no previous claims or convictions and a clean driving licence.


Drivers over 70 tend to see a slight increase in their insurance renewals. That’s because, statistically, older drivers are more likely to be involved in a crash and suffer serious injuries.

Criminal convictions

Even if you’re convicted of a non-motor-related crime, there’s a good chance your costs could go up. Criminal convictions add to a more risky driver profile, so your insurer will take that into account when calculating your quote.


It’s worth noting that some insurers will also want to know about spent convictions, so be sure to check what you need to declare.

How to manage the cost of your insurance

Things like inflation and the global economy are obviously beyond your control. There’s not much anyone can do about it.

But by managing your risk as a driver, you can help to reduce the amount you pay for your insurance.


Here are a few things to get you started:

  • Try to keep a clean driving record and your licence free from points.
  • Add no claims discount (NCD) protection to your policy, so if you’re involved in an accident you won’t lose your discount.
  • Check whether your vehicle is driving up the cost of your insurance.
  • If you can, park your vehicle in a secure location overnight and let your insurer know where.
  • And check if you’re eligible to switch to Zego Sense — our app-based insurance policy. It could save you a lot of money.

What’s Zego Sense?

Zego Sense is our smart insurance policy that rewards good driving with lower prices.


You can save 12% upfront, just for switching, then get up to 40% off overall when you drive safely. It covers you for private hire and delivery driving (Hire & Reward), as well as personal use (Social, Domestic & Pleasure).

The Sense app uses your smartphone’s sensors to track how well you drive — things like cornering, braking and accelerating. Drive safely and you’ll build a higher driver score, which means lower insurance costs when you come to renew.


Thousands of drivers are already using Sense to save money. Join them and start paying the right price for your motor insurance.

Get a quick quote now — it only takes a minute.