There are a number of factors that affect your insurance premium. Each factor is a statistically based risk for a specific sector of the population. The higher the risk with a person, the more they are likely to pay for their insurance.
Outlined below are the main criteria used by insurance companies to calculate premiums which include driver's gender, miles driven per year, purpose for using the vehicle e.g. whether for work or pleasure.
Age : Statistically, drivers under the age of 25 are at greater risk of being in an accident than those over age 25. Drivers between the ages of 50 and 65 generally have the safest records and as a result will pay less. (Of course older drivers, on average, spend less time on the road and as a result will pay even less for their insurance.)
Gender : Women are statistically safer drivers, but that trend is changing as more female drivers get on the road. Nowadays there are numerous companies who provide insurance to women only so you can benefit from reduced premiums by using these specialist companies.
Marital Status : A married person will pay less than a single person with the same driving record. And you can also benefit from reduced premiums if you and your partner use the same insurance company.
Online insurance : In order to keep their overheads low a lot of companies now offer generous discounts if you apply for insurance online. Sometimes this can mean as much as a 15% discount on your premium so this should not be over-looked.
The above are 4 of the main factors, but in the increasingly competitive insurance market the numerous companies use a number of other criteria to determine the exact premium. The following are some, but not necessarily all, of those criteria.
Location : Where you live can make a big difference. People living in areas with little or no traffic are likely to spend less on insurance than those living in congested cities or suburbs because areas with a lot of traffic tend to see more accidents. Some postcode areas have a higher rate of vehicle thefts, which can result in a higher premium.
Driving Offences : Having an accident or points on your licence put you at a higher risk for accidents and this will lead to a higher premium. Some insurance companies will penalise you for your record for as many as five years from when the incident occurred. However, keep in mind, as your record improves, your premium will get gradually lower.
Vehicle Type : A cheap car will cost less to insure than one which is top of the range with all the ?bells and whistles?. Also, some insurance companies are now looking at ?Green? cars to provide even lower premiums.
Accident Claims : A clean driving record that is free of accidents will hold far better for you than lots of minor driving offences.
Occupation: Insurers have found a correlation between your occupation and the perceived risk. For instance a sales rep who is on the road for 1,000?s of miles each year is more likely to have an accident than someone who has a desk job.
Driving distance to work : Once again this is all about the amount of time spent on the road which in turn could means increased risk of accident. Especially, if your work place is in a built up area.
Miles driven each year : Directly related to the above. When applying for insurance make sure and give an accurate estimate of your mileage as it can make a substantial difference to your premium.
Years of driving experience : The more years you have driven without making a claim will also make a big difference.
Business use of the vehicle : If you are using the vehicle for business use then this will tend to increase the premium.
First time driver : Ir-regardless of age, you will have to pay higher premiums until the insurance company can build up some history.
Vehicle alarm fitted: Plus the type of alarm fitted will also have a bearing on your premiums.
Multiple cars : Having multiple cars in the household and using the same insurance company to insure all the cars will help reduce premiums.
So how can I ensure I get the lowest premiums?
The Internet has made it so much easier to get a lot of quotes from a number of insurance companies. There are also plenty of companies who specialise in policies for young, female & older drivers. So shop around and spend time comparing quotes and you will be pleasantly surprised by how much you can save by doing just 1 hour of insurance premium homework.
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