Why insurance premiums differ for the same car

The reason lies not only in the vehicle itself but in the driver’s risk profile, how the car is used, and the excess chosen, Ernest North, co‑founder of Naked, explains. “People often assume car insurance is priced mainly on the car. But in reality, insurers are trying to estimate two things: how likely you are to claim, and how expensive that claim is likely to be. That is why your insurance quote and your neighbour’s can differ, even if you drive the exact same car.”

Insurers assess factors such as age, driving experience, claims history, length of time insured, where the car is parked, and even credit record. Different providers weigh these elements differently, which is why quotes vary. “Insurers don’t price a Toyota Corolla in isolation,” says Ernest. “They price a Toyota Corolla driven by you, in your context.” For example, someone with more than ten years’ driving experience, a clean claims record, and secure parking will likely pay less than a newer driver who has claimed recently and parks on the street in a higher‑risk area.

Excess also plays a direct role. A higher excess usually lowers the monthly premium, while a lower excess raises it. “The key is to choose an excess you can realistically afford,” Ernest advises. He cautions that some policies add extra excesses in certain scenarios, such as if the driver is under 25 or claims within the first three months. These can significantly increase costs when something goes wrong.

Optional extras like car hire or credit shortfall cover can also push premiums higher. Ernest stresses that comparing quotes requires more than looking at price alone. “People often compare prices without comparing what’s included.

“The right question isn’t only ‘what does it cost?’ It’s ‘what am I covered for, and what would I pay if something goes wrong? The best approach is to compare like‑for‑like quotes across insurers, ensuring cover, benefits and excesses are genuinely