Five Questions About: Car insurance premiums

Why is car insurance so expensive?

Insurers have been losing money on car insurance. They blame fraud and exaggerated personal injury claims, and say whopping premiums reflect the increased risks they face.

Should I shop around?

Yes – drivers save an average of £375 by shopping around for the best deal rather than sticking with the same insurer. Don't worry about your no claims discount – you take it with you.

Should I change my car?

Some things you can't change – your age being one of the most important in insurance terms – but if your car falls into one of the lower groups insurers use to help set their prices, your premium will fall. Check the details at Thatcham.org.

What other practical steps I can take?

You can get discounts for fitting Thatcham-approved security devices such as an immobiliser and alarm. Cut your mileage, don't make any modifications (such as extra lights and spoilers), buy your policy online and pay the premium upfront rather than fork out interest on monthly instalments.

What about adding "named drivers" to my policy?

Having an older person, such as a parent, as a named driver can, in some cases, actually reduce your premium. But it's vital the person named as the main driver on the policy is the main driver in reality – otherwise you're committing a fraud known as "fronting". Our research found that more than a quarter – 27 per cent – of drivers would consider fronting to save money. But don't be tempted as not only is the practice illegal, it can invalidate your policy.

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