Loyalty to LV has cost me higher car insurance premiums

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My car insurance renewal quote from LV has increased by 24% from £352 to £438 despite low mileage, a low-risk postcode and no claims. I feel loyal customers are being penalised.
PH, Kidlington, Oxfordshire

Insurers have indeed penalised loyalty for years so they can fund bargain premiums to attract new ones, but in January they were banned from doing this by the Financial Conduct Authority. LV told me that during the lockdowns of 2020 and 2021 when cars were driven less, it passed savings on to its customers and that the average cost of motor insurance across the sector was the lowest since 2015. It’s true that the cost of many car insurance policies fell by an average of 6% during the pandemic, but LV actually raised yours by 10% in 2020 and by 15.6% in 2021. When I pointed this out to LV, it clarified opaquely that savings were passed on “where possible”, but that “other factors”, including claims inflation and the cost of repairs, had to be priced in.

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Car insurance premiums are rising across the board this year, but the average increase in the first three months of 2022 was only 2%, according to figures from, and the average premium this year is still lower than in 2019.

LV says its eye-watering price rise is due to changes in its risk modelling and an increase in claims and repair costs. After my intervention, it agreed to apply a “discretionary discount” of £22 to your premium, which still leaves you with an 18% increase. In future, you may want to shop around for the best deal rather than renewing with the same provider.

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