To work out the likelihood of you making a claim insurers will look at details about you and your car, and these details can greatly affect the amount you will need to pay for car insurance. Below are the key factors that car insurers use to determine the cost of your insurance premium:
About your car:
Car Value – The more expensive your car is the more expensive it will be to replace (and typically, the more expensive it will be to fix too). So, the higher the cost of the car, the more you can expect to pay for your insurance.
Car Power – The faster and more powerful the car, the more likely it is you will be involved in accident. This will increase the likelihood of you both making a claim and also the size of that claim, so higher power cars typically have higher cost premiums.
Car Desirability – The more desirable your car the more likely it is to get stolen. Replacing a stolen car is a huge cost for the insurer and so this risk will be reflected in a higher premium. Some classic cars for example can incur larger than normal premiums.
Your Age – Younger drivers statistically have a higher risk of having an car accident and so will pay the most for insurance (the 17 – 25 age group typically has the highest premiums)
Your Job – Some professions are statistically seen as including higher risk individuals (e.g. students, journalists, actors etc.) and so will be used as a factor in deciding the cost of your insurance.
Where You Live – As a rule of thumb, built up urban areas are likely to have more traffic on the road (increasing the likelihood of an accident) and more car theft and so living in such areas will increase the amount you will need to pay for insurance.
Car usage and storage:
Your Claim History – Insurers believe that if you have claimed in the past you are more likely to claim again. Most insurers will offer a no claims bonus which can significantly reduce the cost of your insurance.
Previous Penalty Points – Insurers take this as a sure sign that you are a high risk driver and will reflect this in charging you more for insurance than those with a clean license.
Car Storage – Keeping your car in a garage as opposed to on the street can reduce the chance of theft and therefore reduce the amount you will be expected to pay for insurance. This can be particularly important if you live in urban areas where insurers will charge more due to the perceived increase in the risk of car theft.
Mileage – The more you drive the more you are likely to be involved in an accident so higher mileage policies will typically cost more.
Type of cover:
Third Party Vs Third Party Fire and Theft Vs Fully Comprehensive – The level of cover you require is one of the more obvious factors determining how much your insurance is going to cost you.
Voluntary Excess – If you are willing to accept some initial costs of your future claims upfront this will both reduce the amount of claims you are likely to make and also the cost of those claims to the insurer. Insurers will therefore offer you lower cost premiums.
Unfortunately, some of these things you can’t change (like your age), but other things like how you store your car, how carefully you drive and the type of car you buy can all have a significant positive impact on reducing the cost of your insurance.