What Factors Affect Your Car Insurance Premiums?

  • Posted 25 Mar
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What Factors Affect Your Car Insurance Premiums?

Car insurance premiums vary for each individual, and insurance companies will use a wide range of information in deciding how they charge you. As a driver and insurance policy holder, it’s crucial that you know what factors are affecting the cost of your insurance premiums.

In a nutshell, the information that is used to determine your premium include such things as your personal information, driving record and the type of car you drive. Below are some more factors that insurance companies use to determine your car insurance premiums…How to lower your premiums

1. Where you reside

In assessing your insurance premiums, car insurance companies take your address into account. If you are living in an area that is prone to higher car thefts and break-ins, your insurance premiums are most likely going to be high.

This is because insurance companies price their coverage against risk. If your car is likely to be stolen, broken into, or damaged as a result of crime, you will have to spend more on your auto insurance premiums.

2. How you use the car

Your type of work is an indication of the way in which you will be using your vehicle. If you are employed in a field where you will be driving frequently, this may affect your premiums. Insurers see this type of car use as a potential risk, as you are using your car more than someone who is largely commuting by public transport.

3. Your age

Your age is taken into account because insurers see younger, less experienced drivers as a greater risk on the road. With less experience, younger drivers are seen as being more prone to getting into accidents.

Therefore, if you are a younger driver, you should be prepared to pay more on your car insurance premiums.

4. Your driving record

If you have a bad driving record or claim history, this is going to have a negative impact on your insurance premium, causing you to pay more out of pocket. The more offenses you have on your record, the higher you will pay. This is why it’s so important to keep a good driving record. Reckless driving will play into your insurance costs.

5. Your car make and model

This is one of the most important factors in determining your insurance premiums.

  • If you are driving a big powerful “gas –guzzler”, that’s built for speed, you will probably pay higher premiums
  • If your car has an alarm, you will pay less, as insurers see the safety of your vehicle as a less risky investment for them.
  • Some cars are seen as greater theft risks, while others are known for being involved more in collisions.
  • Cars that have passed safety tests and are approved by the car insurance companies will have lower premiums.

If you have the right information and are an educated consumer, you will know exactly what is playing into the cost of your insurance premiums. Do your research, and you will be able to make the best choices with regard to the type of vehicle to purchase so as to get the lowest insurance premiums.

Need help with your car insurance? Not sure what type of car to buy? Contact our team today to chat about your car insurance and buying needs.

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