WE were warned it was going to happen and, as the Association of British Insurers (ABI) told us earlier this week, it finally has: thanks to a change in the way personal injury payouts are calculated and an increase in insurance premium tax, the cost of car insurance has gone up.

According to the ABI’s Motor Premium Tracker, the average rise in the cost of an annual policy is £48, so you can imagine my surprise when I received a renewal quote from Tesco Bank telling me my premium was about to shoot up from the £429.55 I had paid last year to £666.46 this year.

Yes, that’s a rise of £236.91 – nearly £200 more than the average increase – despite the fact I had collected another year of post-qualification driving experience and supposedly earned a little bit more by way of a no-claims bonus.

For Alastair Ross, head of public policy for Scotland, Wales and Northern Ireland at the ABI, the rise is a facet of the insurance industry, like many other business sectors, offering tempting introductory deals to lure new customers in.

These are designed to not only benefit the providers but customers too, by essentially letting them insure their vehicles at knock-down prices. The motor insurance industry has, he says, operated at a loss for most of the past 25 years.

The solution: don’t take the easy option of accepting your renewal quote but instead shop around for a new deal every year.

“Insurance is a very competitive market, with many customers shopping around to get the right policy for their needs at the best price,” Ross says. “The recent changes made by the industry regulator, which we had long called for, and which include showing both the existing and new premium on renewal notices, should make it very clear whether people are being asked to pay more.”

Personal finance commentator Andrew Hagger of MoneyComms agrees, noting that “the golden rule” with any type of insurance is “to never accept your annual renewal notice at face value”.

“The insurance industry is as cut throat as ever and many providers will offer you a rock-bottom price when you sign up as a new customer. However, that's where the good news and competitive pricing ends,” he says. “The insurer hopes that one year later – and in subsequent years – you will accept the increased renewal premium because it sounds reasonable or perhaps because you don't think you have time to shop around. Rather than play into the insurer's hands and help increase its profits, you should always look after your own bottom line and check whether you can get the same cover cheaper elsewhere. If you can save £30 or £50 – or maybe more – for 20 minutes surfing on your laptop, surely it's a no brainer?”

Boy, was he right. Keeping my voluntary excess at £200, with all other details save the extra year since passing my driving test and making an insurance claim remaining unchanged, I turned to price comparison site Moneysupermarket.

Would you believe that the best quote on offer was for £376.76, a full £290.09 lower than the renewal quote sent to me by Tesco Bank? And would you credit who the quote was from? None other than Tesco Bank itself, which says that its premiums "are assessed on an annual basis and prices can go up as well down depending on a range of factors".

"At Tesco Bank we work hard to offer our customers the best value premiums and are confident that we offer some of the most competitive prices available,” a spokesman adds.

Though Ross at the ABI cautions that “customers should always remember to buy the policy that best suits their needs, and not simply the cheapest on a price comparison website, or elsewhere”, the benefits of shopping around – no matter how much of a hassle it is to keep doing – are clear.

The problem is that not everyone has the time, inclination or wherewithal to do so, meaning they could be losing out to the tune of hundreds, not just tens, of pounds.

Suffice to say, my one-year-old Ford EcoSport has now been insured with the same provider and the same level of cover for almost £300 less than it would have been had I simply allowed my policy to renew. So, Tesco Bank, it looks like you’ve got my loyalty. It would have been nice if you had chosen to reward me for it.