Insurers are blaming these hikes on everything from an increase in minor injury claims through to uninsured drivers.
Whatever the reason, you may find that your cover costs more than it did last year despite the fact that you have an extra year’s no claims discount.
But there are also more hidden costs that can they hit you with – so what are these stealth charges?
Policy adjustment fees
Insurers always point out that you need to keep your policy details up to date if there any changes.
What they generally fail to tell you is that they will charge a fee, usually in the region of around £20, for making any changes to your policy. This is also the case even when adding a named driver.
There’s not a lot you can do about this if it’s an unexpected change. If this worries you, it may be worth asking a number of insurers what their adjustment fees before you take out a new policy.
It’s important you do inform them of any changes, as they can refuse to pay out on a claim if any of your detail is found to be incorrect.
It would be fair to assume that if you have paid for a year’s insurance up front, you’ll get back an amount of money that applies to the remaining period of cover.
However, cancelling a policy mid-term can actually leave you well out of pocket as insurers will only give you back a percentage of the remaining cover.
For instance, if you cancel a policy after 3 months you may only get back 50% of your premium.
Leave it as late as three months from the end of your policy and you may well get nothing back.
Even if you pay monthly, your insurer may still require you to pay a portion of your policy before they agree to cancel it.
A recent survey by Which? found that around 60% of insurers charge a cancellation fee - the average being £40.
Cancelling your policy could also hit you in the pocket at a later date, as you will not accrue any no, no claims discount on that policy.
To avoid that, it is usually better to transfer the policy over to another vehicle rather than cancel it and start a new one.
One more thing, although uncommon, is that some insurers will charge a set-up or renewal fee on your policy, so make sure you check for this before you take out cover.
When offering you a policy, most insurers will give you the total cost of the policy and how much it will cost you per month if you pay in instalments.
Insurance premiums are currently very high, paying monthly is often the only way people can afford to pay for their policy - but if you can pay all in one go then it will work out cheaper in the long run.
This is because most insurers charge interest on monthly instalments, like any form of borrowing, and fees can be significant.
Even taking an average interest rate of 18% and applying it to an average priced policy of £850 would mean that you would pay an extra £153 over the course of a year.
You should always check the terms and conditions of your policy and, if necessary, call up the insurer and ask them about any adjustment fees, cancellation charges and any monthly interest payments.
It’s worth noting that not all insurers charge interest on monthly instalments, so it always makes sense to shop around for cover and using MoneySupermarket means you can compare the price of hundreds of insurers in just a few clicks.