How your car insurance policy is calculated will depend on a number of factors. Many of these will relate to you and your vehicle, although others will be in regard to your location and other factors in the world around you. Here are some of the biggest things that insurers look at when calculating your price.
#1. You and Your Driving Habits:
There are many personal factors that your insurer will take into account when it comes to calculating your policy price. Your age is one of the most important factors since younger drivers are typically at a higher risk than older ones. Also, the length of time that you have held your license tends to impact your price since newer drivers are typically at a higher risk of accidents than those who are more experienced. And, if you commute to work, particularly if you drive your car during rush hour, you might see your premium rise, as this suggests that your car is more likely to be on the road during busy periods and, therefore, at a higher risk of being involved in an accident. The more miles you do in a year, the more you can expect to pay, as driving more increases your risk of being in an accident.
Don’t forget that your claims and accident history will also be taken into account.
#2. Your Car:
It’s not just you that your insurer will take into consideration when pricing your policy. The car that you drive will also have an impact, which is why you may find that your premium rises or falls if you change your vehicle. Each car in the UK is placed into an insurance group, which is determined by a number of factors. These include the type of car, e.g. hatchback, saloon, etc., the car’s performance and safety rates, security features, and the cost of damage repairs. Insurers will also likely look at the age, model, and value of your car, but this will vary between insurers.
#3. Where You Live:
When your insurance price is calculated, your insurer will also take your postcode and address into consideration. This is to determine your premium by looking at your neighbourhood; the insurer will look into the number of claims in your area and the reason for them. High numbers of claims for theft, damage, and volume of traffic are just some of the reasons why an insurer may charge you more based on where you live.
#4. Who Drives Your Car:
In addition to yourself, if others are going to be driving your car on a regular basis, your insurer will also take their information into account. For example, if you’re an experienced driver and want to insureyour teenager on your car shortly after they have passed their test, you can expect your premium to rise to accommodate their inexperience behind the wheel. On the other hand, if you’re a new or young driver whose car is being regularly driven by a more experienced parent, you may be able to save money on your insurance.
Some other factors that can affect your insurance premiums include previous criminal convictions, the cost of claims, fraud, and taxes.