This site aims to explain how car insurance premiums are usually calculated in response to repeated questions on various internet fora such as

• I added my mum as a driver and the premium went down.
  
  
• Why is someone quoting £300 and someone else £1200?
  
  
• Why is my renewal premium higher than my first year's premium?

Unlike a price comparison site, this site uses simulated quoters which means that as well as showing the final premium it can show how that premium was calculated.

The insurance industry is quite cautious and I know that some people question the reliability of the calculations on the basis of how can they say that I am high risk because of my occupation, age etc.

It is quite clear that on an individual level it is impossible to say that someone has a type of behaviour because they fall into one quite wide category.

Equally it is true to say that historically publicans as a group were more likely to drink and drive than many other occupations and that all insurance premiums are calculated on averages.

Of course whether it is fair or not won't help you if you want to try and argue with a price comparison site.

I have got my premium breakdown what does it all mean?

Most insurance companies operate schemes, schemes are targeted at a sector the market such as young drivers, safe drivers, classic cars or drivers who drive during quieter parts of the day. Most insurers will have multiple schemes in the market at the same time.

Generally insurers operate schemes so that they can calculate the likely costs of claims and budget accordingly and offer the lowest price to the type of customer that scheme is aimed at.

These schemes are why you sometimes see on the price comparison sites an insurance company offering more than one premium where one is competitive and the others are not.

As these schemes are all about averages different ways of calculating the cost of claims can result in very different premiums.

You could offer everyone the same premium regardless of the risk they represent, if you did this the safer drivers would be subsidising the more risky drivers.

You could offer a low starting premium in the calculation and then load it very heavily for the risky driver.

You could offer a high starting premium in the calculation and then load it very little for the risky driver.

All of these options and other will give very different premium for an individual whilst covering the cost of the claims.

Each of these steps is explained here.

The quotors used on this site are not real live products but they are realistic and undertake the steps that a real insurance scheme would typically make. But they use numbers that are similar to but not identical to schemes live in the market.

To make data entry easier options for certain risk factors such as vehicle and occupation are a tiny subset of a the live ABI lists but they have been chosen to represent a significant cross section of the insurance significant factors.

For example a Publican is a different risk to a Computer Programmer but a Computer Programmer is virtually the same risk as a Computer Operator or an Admin Manager.

Equally a Ford Fiesta 1.1 is virtually the same risk as VW Polo 1.0 or a Vauxhall Corsa 1.1.