Renters can pay up to 11 per cent extra for car insurance compared to homeowners, our research has revealed – as insurers charge a premium for what they see as a greater risk.

The little-known pricing quirk means renters can end up paying considerably more for cover – but some but some insurers will not charge them any extra, meaning shopping around is essential.

Insurers charge renters more because they cause more claims, on average.

This is for a wide range of reasons, though how insurers set their pricing is a tightly-guarded commercial secret.

But renters tend to be younger than homeowners, and therefore have limited driving experience, resulting in more crashes. 

Motoring away: Renters face higher insurance premiums than those with mortgages, but it all depends on which insurer you go with

Many rent in cities, which comes with greater theft risk. Renters are also more likely to park in the road, rather than a driveway, increasing the chance of theft or accidental damage to the vehicle.

Aside from these practical driving points, homeowners also tend to have better credit scores than renters. 

This is because mortgage payments count towards credit-worthiness but rental payments largely do not, and this can impact premiums too.

To illustrate how renters pay more, we headed to each of the four main comparison websites and posed as a 35-year-old owner of a Honda Jazz. 

We compared the premiums we were offered when we said we were a homeowner, with the premiums offered when we said we were a renter – keeping the rest of the details the same. 

The overall cheapest price for a homeowner with this car was £313.27 a year, for a comprehensive telematics insurance deal from Ticker via Confused.

That rises 6.2 per cent, to £332.80 a year, for a renter – though with telematics insurance exactly how much you pay depends on how you drive. 

This is where the insurer uses a system in your car to monitor your driving, either a separate device or using the driver’s smartphone. 

The cheapest quote for a homeowner on GoCompare was £363.95 a year for comprehensive cover, with a telematics policy from insurer Hastings YouDrive.

That that premium rises 11 per cent to £404.03 for a renter – the highest increase we found.

Likewise, the lowest price for our example driver on CompareTheMarket was £367.64, from Flow – again, for a homeowner. That rises 2.5 per cent to £377.03 a year for those with a landlord.

But one insurance firm in our test did not charge any extra for a renter to insure a car.

That was from broker U Drive Cover, which charged £490.97 for both renters and homeowners, through price comparison website GoCompare. 

How to save money on car insurance as a renter

The best course of action is to take your time and shop around.

Using different price comparison websites can lead to very different prices, and remember that major insurance firms such as Direct Line and Aviva are not on these websites. 

There can also be a big discrepancy between the same insurance firm across different price comparison websites.

For example, Flow charged our Honda Jazz driver who rented £485.34 on GoCompare, £377.03 on CompareTheMarket and £389.65 on Confused. 

That price difference reflects the different questions asked by various price comparison websites, which leads to a differing risk profile of the same driver – and therefore a varying premium.