How we calculate your car insurance price depends on a few things. Some of these relate to you and your car, while some are dependent on the world around you.

We’re constantly looking at the price we charge our customers, and prices fluctuate depending on the market.

What affects my car insurance price?

There are lots of things that affect your car insurance price, both from you and from the outside world – here are some of the biggest things insurers look at:

You and your driving habits

Your age is a really important factor when it comes to your car insurance as typically younger drivers are a higher risk than older drivers.

The length of time you’ve held your licence can also impact your price. Newer drivers are typically a higher risk than more experienced drivers. If you drive your car during rush hour or commute to work, you might see your price affected as this suggests your car will be driven during busy periods and more likely to be involved in an incident.

Spending more time on the road and doing more miles a year can impact the price of your insurance as you’re more likely to be in an accident, simply because you drive more.

The type of car you drive

Your car has an impact on the cost of your insurance which is why your price may change if you change your car.

Every car in the UK is placed in an insurance group which is determined by:

  • the type of car
  • cost of damage repairs
  • performance
  • safety
  • security

Insurers can also look at the age, model and value of your car - but these rating factors differ from insurer to insurer who can use their own insurance groups and claims experience to get a price.

Your address

When we calculate your insurance price, we ask for your postcode and address to look at your neighbourhood. We look at the number of claims in your area and whether they are due to theft, damage and volume of traffic to name a few.

If you move, you could see your insurance price go up or down depending on the risk presented in your area. We look at the different types of claims that are made by your new neighbours – for example, if there are more claims for damaged or stolen cars in your new area then you may see your insurance premium go up.

Who drives your car

We look at the details of any additional named drivers including their driving history, claims and convictions. Depending on their circumstances, this can change the cost of your insurance.

Your accident and claims history

All insurers will ask for your claims history – this includes any previous incidents, accidents or claims.

At Admiral we ask for claims or accidents dating back three years, and for convictions it’s five years.

We look at your accidents and/or claims, and if you still have your No Claim Bonus (NCB). If you do, we can see you’re less of a risk than a customer who doesn’t have their NCB.

Drivers with motoring offences on their licence are considered a bigger risk on the road than drivers who have none. The severity of an offence will also dictate how much your price is impacted.

The cost of claims

As well as any claims you make affecting your car insurance price, claims made across the country are considered. Whether you need cover for your car or home, everyone’s price helps pay for the nation’s claims. Think of it like council tax – your payments are used to pay for things for everyone in your borough.

Each year we try to predict whether the cost of claims for the year ahead will go up and we’ll adjust our prices.

Regulatory and government changes all have an impact, as well as increases in the number of claims across the country. Insurance companies pay millions of pounds every year when settling customer claims, and we all absorb the car replacement or repair costs linked to claims. If the costs of repairs go up each year, this will be reflected in insurance prices.


Insurance fraud leads to a rise in everyone’s price – this can be in the form of crash for cash fake whiplash claims. According to a 2016 report by the Chartered Institute of Insurers, insurance fraud costs policyholders up to £50 per year.


Insurance Premium Tax (IPT) is a government tax on the following insurance policies:

  • Car insurance
  • Home insurance
  • Van insurance
  • Travel insurance
  • Pet insurance

Every insurance provider must charge this tax and a recent increase by the government means a rise in your insurance price. In January 2018, the standard rate of IPT was set at 12%.

Car and van insurance are subject to the standard rate of IPT, while travel insurance and other motor insurance for people with disabilities is subject to a higher rate of 20%.