There are good reasons why car insurance premiums aren’t the same for everyone. Broadly speaking, you will be assigned a premium that’s calculated by your insurance based on the risk of your car getting stolen or your risk of getting into an accident. That said, people are all unique. However, many elements are common and can be used to determine a reasonable premium.
With car finance companies requiring you to have car insurance, it is good to know what affects the price. Keep reading to learn more about the six factors that can affect your car insurance premiums. Take a look!
The variables that will determine the car insurance premiums you will pay for your car are your age, gender, marital status, a financial background check, and where you live. These factors are essential on the grounds that the statistics gathered by insurers show that they do have an effect on the probability of incidents or accidents occurring.
In addition to your demographics and socioeconomic status, insurers also look at the car you drive. Insurers often determine car insurance rates by car. It’s not a new phenomenon. Typically, more expensive cars will have a much higher premium as they are more costly to repair in the event of an accident and cost more to replace if they are stolen. That said, those cars which are easily stolen (or which are consistently targeted by car thieves) present a more prominent theft risk and, as a result, will have much higher premiums as well.
Significantly, car insurance premiums can rise gradually over time due to the fact that in case of an accident, the cost of repairing the car increases despite how old the car is. It doesn’t cost any less to replace the bumper on a car that’s only one year old than it does on the same car that’s fresh out of the box. The cost of labour, parts and paint will all increase after some time, despite the age of the car. With the overwhelming majority of cases coming from damage caused by accidents, the reduced total value of the car has very little bearing on the cost of the car insurance premium.
Another factor that is critical to note on your car insurance policy and which affects the premium is the primary driver. The car’s primary driver is generally the individual who drives the car the most often in a given period, usually a month. The primary driver’s age and other demographics, similar to when they received their driving license, history of previous accidents, gender, will be the essential deciding factors when it comes to determining the car insurance premium; most insurance agencies will ask for these details.
As previously referenced, one of the factors used to determine your car insurance premium is your age. Younger drivers, specifically, consistently believe this to be unreasonable. In any case, statistical proof shows that younger drivers are at a much higher risk. These drivers are more likely to have an accident because of their lack of or limited experience on the road. The higher car insurance premium, essentially, covers this higher risk. Older or more experienced drivers are less likely to get into a car accident and, as a result, will have lower-priced car insurance premiums.
Although younger drivers are viewed as generally unsafe, those over 30 are considered safer. That said, that is on the grounds that car accident statistics show that drivers in the older age range are less likely to have an accident.
Ensuring your car’s safety by installing a supported and approved car alarm system and a GPS tracking device is a great way to lower your car insurance premiums. However, what might be said about cars that don’t have these safety measures? These cars can still be protected, yet this will depend on the type of car you have and where it is located.
Taking care of your car, according to the insurer, also relies upon where and how it is parked, especially overnight. Various areas have their unique risk profiles, determined by the recurrence of burglaries and other different crime incidents, like hijackings and smash and grabs. In the event that your car is parked overnight in a security estate with guards at the entrance or in a locked and secure garage, it is less likely that your car will be targeted in comparison to one parked on the street. That also implies that your car insurance premium for your protected car will be lower than that which isn’t undercover.