Auto news headlines

Car Insurance: Calculating Your Premium

There is no fixed standard when it comes to car insurance. The price you pay depends on a myriad of different things, from past driving history to your current marital status. The underwriters from any insurance company look at all the different factors when deciding your premium, making each insurance quote unique to the driver.

Your postcode is an influencing factor as the theft rate of the area is considered; in a neighbourhood with a high crime rate your car is more at risk of being broken into or stolen, resulting in a claim. Likewise, parking your car on the street exposes it to possible crime, so you can obtain a lower premium if you have a secure place such as a driveway or garage to keep your car in overnight. Fitting security devices such as alarms, immobilisers and trackers are another way to lower your premiums if you don’t have access to private parking.

Believe it or not, your occupation is very important to the underwriters when they are calculating your premium. If you have a safe, ‘sensible’ office job like accountancy, you’re seen as less of a risk-taker than perhaps a journalist or actor. However, the mileage you would cover in your job can up your premium, so if you use your car a lot for work, it may be a good idea to ask about a company car, and keeping your own for social and domestic use only.

It may be tempting to insure all and sundry on your policy, in case your friends decide to borrow your car for the day, but in fact the more people insured on it, the higher the cost as you’re seen not to have complete control over who drives your car. Only insure those who really need it, and try to keep it to those over the age of 25. Drivers in the 17-25 age group are seen as the most likely to make a claim as they have less experience on the road, and tend to be more reckless.

Finally, the car itself has possibly the biggest impact on the cost of the policy. A large powerful car is more likely to be in an accident than a small inoffensive 1.2 litre. Having said that however, the 17-25 age group often buy smaller cars relatively cheaply, and add lots of performance or appearance enhancing parts, so just having a small car doesn’t guarantee cheap insurance. Anything which improves performance of the engine or alters the appearance of the car, for example alloy wheels or neons, will make your car more attractive to thieves, and therefore more of a security risk. Plus, of course, enhancing the engine usually means you want to drive faster, making you a potential hazard on the road.

Remember, any modifications to your car must be declared to your insurer, even if you think they don’t matter. That’s for the underwriters to decide. If you’re unhappy with your current policy, check the points above and see if there’s anything you could do to reduce the premium.

Compare car insurance. Get a great deal on your motor insurance online. You can find cheap car insurance to suit you.

Leave a Reply

You must be logged in to post a comment.